Travel Insurance: the easy guide

Travel insurance. Boring huh? It is ... until you need it. Then you probably wish you'd paid closer attention to the detail.

Are all the parts of a policy the same?

This was a question we got asked recently and the simple answer is no, they aren't. While actual policy benefits vary considerably between companies, there are several types of cover within most policies.

Medical emergencies & evacuation

From being squashed by an oversized Sumo in Japan to falling from the Rodeo in Texas, if there is one reason to buy travel insurance, this is it.
Hospital costs in the USA can approach $10,000 per day, while medical evacuations to Australia can easily exceed $100,000. The cost of a travel insurance policy suddenly seems like small change, and is infinitely better than having to re-mortgage your house to bring loved ones home.

SOME THINGS TO LOOK FOR:

1. Unlimited cover if you're travelling to the US, Canada or Japan.
   
2. Cover for Emergency evacuation.
   
3. An allowance for a relative to accompany you if you're ill or injured and travelling alone.
   
4. Cover for emergency dental work.
   
5. Cover for pre-existing medical conditions or pregnancy.
   

Regardless of who you buy a policy with, definitely take your time to read the policy wording carefully, particularly the exclusions, and if you have any questions, ask.

Cancellation

This section of a policy covers you for cancellation costs if you suddenly find you can't go on your trip for some unforeseen reason such as the serious illness of a close relative. The important thing to remember here is that for this section of the policy to be useful, you have to buy the policy when you start booking tickets and not the week before you leave.

SOME THINGS TO LOOK FOR:

1. Loss of non-refundable deposits and costs paid in advance if you cancel before departure due to illness or injury, compulsory jury duty, unforeseen retrenchment and natural disaster.
   
2. Cancellation in the event of a terrorist event. Most travel insurance companies won't provide cancellation cover in the event you decide not to go due to a terrorist incident. It is worth asking this specifically and checking the policy wording in detail for these specific exclusions.
   

Baggage

Baggage is the reason most people take out travel insurance and is actually probably the least important component; things can be replaced, health can't. There are usually per item limits and exclusions regarding the definition of ‘reasonable care' which means a claim will be denied if you leave your baggage unattended in a public place and it's stolen. Lastly, should you have to claim, you will usually be asked for proof of ownership in some form, so you might like to consider this before you go.

SOME THINGS TO LOOK FOR:

1. individual item limits
   
2. If your luggage is stolen from your hotel room.
   
3. If luggage is stolen from the boot of a locked car
   
4. Does it cover loss of cash
   

Personal liability

If you cause an accident when abroad and injure someone, insurance can cover your liability and legal expenses but most won't pay legal expenses if you have a car accident.

Rental cars

When you hire a car overseas, if you have an accident there is usually a policy excess that you have to pay to the car hire company. Travel insurance can cover the costs of this.

Delays

Flight delays aren't uncommon, but very occasionally delays can run into days which can quickly become expensive. The conditions and benefits vary considerably between policies so always read the policy wording carefully.

Resumption of journey

Most travel insurance policies end the minute you arrive home, so if you have bought a policy for 3 months and come home after 2 weeks, you probably aren't entitled to a refund on the 'unused' portion.

However, some policies allow for special circumstances where if you had to return home because of a sick relative or a death in the family, then not only will you be able to claim for some of these costs, but you can also resume your journey. Again, the conditions and benefits vary considerably between policies so always read the policy wording carefully.

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