Travel insurance cover

Broadly, travel insurance covers your:

• Expenses if you’re injured, fall sick or die.
• Belongings if they’re lost, stolen or damaged.
• Bookings if you need to cancel a tour or flight.
• Liability if you injure someone or damage their property.

Health cover

Comprehensive travel insurance policies usually provide unlimited cover for emergency medical costs, such as x-rays, operations and repatriation (see our policy database for comprehensive policy details). Emergency dental expenses are an exception. These are often capped – although the caps can vary between $500 and $4000.

The policies we surveyed let you claim an allowance for incidentals such as phone calls or magazines if you’re stuck in hospital. This tends to be restricted to a daily rate up to a maximum total (for example, $75 per day up to $8000).

There are situations where your insurer won’t cover your emergency medical expenses. In particular, you may not be covered if you need treatment for an undisclosed medical condition from which you suffered before you took out your policy (see “Pre-existing conditions”, below).

There are other exclusions to watch for too:

• Your claim may be rejected if your insurer can prove you were under the influence of alcohol or drugs when you suffered your injury or loss.
• Insurers won’t necessarily cover adventure activities like rock climbing or sky diving, and some charge extra to cover ski trips.
• Claims relating to mopeds or motorcycles may be rejected if the bike has an engine over a certain capacity – often 200cc – or you were riding it without a licence or a helmet.

Pre-existing conditions

A pre-existing condition is a health disorder you suffered from before you travelled. These can range from heart conditions to knee replacements. Unless you’ve cleared it with your insurer first, don’t expect cover if you require treatment for the condition while overseas. Illnesses or injuries connected to your condition may also be excluded.

Don’t despair if you have a pre-existing condition. In many instances, you can still get travel insurance.

Some policies automatically cover conditions such as diabetes, epilepsy and hypertension provided they’re well controlled (for example, they haven’t caused complications or required treatment in the past six months). Your insurer will probably cover other pre-existing conditions too, although you may have to undergo a medical assessment and pay an extra premium.

If all else fails, you can buy travel insurance without cover for your ailment, but you still need to disclose it to your insurer.

As well as your own pre-existing conditions, you should disclose serious medical issues your immediate family has. Otherwise, your cancellation costs may not be covered if a family member falls ill and you have to return home.

Note: Even if you're in excellent health, an insurer may require you to complete a medical assessment if you're 70 years or over. Alternatively, it may reduce the maximum cover limits it offers for certain claims.

Belongings

Travel insurance covers your belongings up to a limit. Some policies pay as much as $30,000 if all your belongings go missing. Others pay as little as $5000.

You’ll also find cover for individual items is capped. For instance, you may only get a maximum of $1500 for a damaged, lost or stolen laptop. You can usually ask your insurer to increase the cap for a particular item in exchange for a higher premium.

Another point to note: many policies only cover your belongings for their “present value”. That’s the cost of repairing or replacing an item so you’re left with something of a similar age, quality and condition. While a few policies do offer “replacement value” – the cost of repairing or replacing an item to an as-new condition – it often only applies to items under two years old or those bought on your holiday.

Common exclusions:

• Claims for lost or stolen items can be rejected if you don’t report the loss to local police or the culpable travel provider within 24 hours of the event (when you report the event, make sure you grab a written statement from the police or travel provider to back up your claim).
• Claims for lost or stolen items may also be declined if you leave them unattended in a public place or an unlocked car (in fact, some insurers will decline your claim if your belongings were left in a locked car overnight or if they weren’t secured in the boot).

Bookings

Most comprehensive policies provide complete cover for non-refundable travel and accommodation deposits if your trip is cancelled for reasons beyond your control (such as a serious illness). But some insurers ask you to specify the amount of cover you want for cancellations during the purchase process.

You’re covered for non-refundable travel and accommodation deposits as soon as you take out insurance. For this reason, it’s a good idea to sign up to a policy as soon as you buy your airline tickets or book your tour. That way, you’re covered if you have to cancel before you depart.

Travel insurance policies include cover if you miss a connecting flight due to an unavoidable delay. They also provide allowances for extra costs such as accommodation if your travel is interrupted for more than a set period (for example, six hours). A typical stipend is $200 per day up to a maximum of $2000.

Tip: If you miss a connection or you’re delayed, make sure you hold on to your original itinerary, your new itinerary and receipts for food, taxis and accommodation. This type of paperwork is essential if you want to make a claim.

Common exclusions:

• Many policies won’t cover losses incurred due to the financial failure of a travel agent or travel provider such as an airline.
• Delays caused by known events when you first took out cover, such as the ash cloud from an ongoing volcanic eruption, are excluded.
• Most (but not all) policies exclude cover if you have to cancel a trip due to an act or threat of terrorism.

Liability

Your travel insurance covers you if you become liable for damages or legal expenses incurred while overseas. Limits for personal liability range from $1 million to $5 million.

Your policy should also insure rental vehicle excess or at least offer this cover as an optional extra. The excess is the fixed amount the rental company charges if you prang its vehicle. As the excess can run into thousands of dollars, the company will offer you the option of reducing it for a fee. But you don’t need to pay this extra fee if the excess is already covered by your insurance.

Common exclusions:

• Your travel insurance won’t cover your legal liability if you crash a vehicle into someone or something (instead, you’ll need to rely on the cover offered by the rental car company).
• You may have to pay the excess upfront if you damage a rental vehicle and then seek reimbursement from your insurer.