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What’s covered?

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Medical expenses

If you’re injured or fall sick, travel insurance covers the cost of treatment at a doctor’s clinic or hospital overseas. If the medical adviser determines you’re too sick to continue your trip, your insurer can help organise and pay for you to get home.

Comprehensive policies provide benefits on top of basic medical care. These include:

  • Additional accommodation and travel expenses if you’re told to rest before continuing your trip.
  • A small daily allowance for extras, such as phone calls and magazines, if you’re laid up in hospital.
  • Airfares and/or accommodation expenses for a companion to travel to you (or remain with you) if you’re in really bad shape.

If the worst happens, your policy should cover reasonable expenses associated with returning your remains to New Zealand or cremating you overseas.

You may not be covered if:

  • Your injury or illness was caused by a medical condition you suffered from before you travelled (see Common questions).
  • You injure yourself while drunk or on drugs.
  • You wait until you’re back in New Zealand to treat an injury or illness suffered on your trip.
  • You suffer a complication late in your pregnancy, which requires you to cancel your trip or seek overseas medical treatment.
  • The purpose of your trip is getting medical or dental treatment (“medical tourism”).

Dental care: Most travel insurance policies only provide limited cover for dental care. Some basic policies don’t cover dental care at all. Cover is usually restricted to repairs or pain relief for previously healthy teeth. Don’t expect compensation if you need treatment for a lost filling or toothache caused by chronic decay.

Belongings

Travel insurance covers your belongings up to a limit. Some comprehensive policies pay as little as $5000 whereas others pay up to $30,000 if all your luggage goes missing.

There are lower limits for individual items. For instance, your laptop may only be covered up to a maximum of $2000, even if it cost you $3000.

If an item is lost, stolen or damaged, your insurer can usually choose to replace it, repair it or pay you its value in cash. You may not receive the item’s original purchase price as insurers often factor in depreciation when settling a claim.

As well as luggage, your policy may provide limited compensation if your credit card is used fraudulently or your passport goes walkabout.

Some policies also cover:

  • Cash if you’re pickpocketed.
  • Emergency purchases, such as a toothbrush and a change of clothes, if your bags are delayed beyond a certain point.

You may not be covered if:

  • You leave your luggage unattended in a public place, such as an airport terminal or hotel lobby.
  • You stow valuable items, such as jewellery, in the cargo hold of a plane, train, bus or ship.
  • You store luggage overnight in your rental car or fail to lock it in a secure compartment, such as the car’s boot.

Valuable items: When taking out insurance, you can ask your insurer to increase the cover limit for valuable items, such as jewellery or camera equipment, in exchange for a higher premium.

Bookings

Most comprehensive policies provide built-in cover for non-refundable travel and accommodation costs if you have to cancel or cut short your trip due to an unforeseen event (such as illness). You won’t be covered if you cancel just because you’ve changed your mind.

Travel insurance can also help if you miss a connecting flight due to an unavoidable delay. Comprehensive policies cover alternative transport to get you to your destination – and most will pay extra to get you to a special event (such as a wedding) on time. What’s more, they provide allowances for extra costs such as accommodation if your trip is interrupted beyond a certain point.

You may not be covered if:

  • You fail to check in at the scheduled departure time or obtain the necessary visas for your trip.
  • You knew of a specific risk that might cause your journey to be cancelled, abandoned or shortened before you took out cover.
  • Your tour is cancelled because not enough people signed up.
  • Your transport or tour provider goes bankrupt.

Travel advice: Before you book your trip, check out the latest travel advice for your destination at the Ministry of Foreign Affairs and Trade’s website safetravel.govt.nz. Your insurer won’t cover you if the Ministry has advised against travelling to the destination. When you take out a policy, check if the insurer has placed any limits on cover due to events such as a natural disaster or an act of terrorism in the country you’re visiting.

Personal liability

Comprehensive policies provide cover if you become liable for damages or legal expenses incurred while overseas. Cover limits for personal liability range from $1 million up to $5 million.

But your travel insurer won’t cover your legal liability if you crash a vehicle into someone or something. This applies to all motorised vehicles.

If you’re renting a vehicle, you’ll be relying on the insurance offered by the rental company. It pays to check you have cover before you drive off, rather than assume it’s automatically included in the rental costs.

Your personal liability may not be covered if:

  • You recklessly or purposefully cause damage (for instance, while you’re drunk).
  • You’re being made to pay an enforced fine rather than compensation.

Rental vehicle excess cover: Some travel insurers include cover for rental vehicle excess within their policies. The excess is the amount the rental company charges if you make a claim. As the excess can run into thousands of dollars, the rental company will give you the option of reducing it for a fee. You don’t have to pay this fee if the excess is already covered by your travel insurance.

Case studies

Scooter crash in Thailand

Paul (PJ) was on a two-week holiday in Thailand. Like many travellers, he rented a scooter to get around Phuket. But disaster struck. Despite wearing a helmet, PJ suffered serious head injuries in a crash. He was rushed to a local hospital.

While PJ had various insurance policies back home, he hadn’t taken out travel insurance for his trip. PJ’s brother Joe says “for the sake of a $150 travel insurance policy, PJ was left hanging”. The family paid $50,000 to airlift PJ from the basic hospital in Phuket to a high-care facility in Bangkok. He was admitted at a cost of about $6000 per day.

Faced with mounting medical bills, the family created a Givealittle page to collect donations. They received more than $170,000 from 1700 donors. Thankfully, PJ stabilised after four weeks. The family used the donations to cover PJ’s expenses, including the cost of his hospital stay and a medical escort for the flight home. Joe says PJ is recovering well.

Bicycle accident in Germany

Liz and John were cycling from Copenhagen to Barcelona on a six-week tour. But in Oelde, Germany, disaster struck. Liz took a spill, breaking her shoulder, elbow and pelvis. "It was just a silly little accident, really. I fell awkwardly. On another day, I might've walked away."

When the ambulance arrived, the medical crew wanted to know if Liz could afford treatment before taking her to hospital. John called the insurer, which promptly agreed to cover the costs.

At hospital, Liz had an operation to put a plate in her elbow. Liz's insurer rang every day to check on her progress. After two weeks, Liz was fit enough to leave hospital, but she had to spend another two weeks recuperating with relatives in the Netherlands before she could fly home. Liz estimates the insurer paid more than $25,000 to cover medical bills and business class airfares. It also reimbursed Liz and John for other expenses, such as the unused portion of their tour.

Broken vertebra before departure

Robert and his wife were planning a trip to the US. They'd booked flights, hotels, tickets to a show and a Mississippi River cruise. But a month before their departure, it all turned to custard. Robert didn't realise he had osteoporosis – until he fractured a vertebra while simultaneously coughing and twisting to fetch a folder from his desk.

Thankfully, Robert had already activated the travel insurance bundled with his credit card. The insurer would cover the couple's non-refundable expenses, provided Robert could prove he had no history of osteoporosis before arranging insurance. "The claim forms were comprehensive," Robert says. "They required my GP to complete some sections and provide my medical history."

Robert contacted the online travel agent, cruise line and show venue to request refunds. While some companies reimbursed the couple all or part of their costs, they were still about $12,000 out of pocket. So Robert filed the claim form and, a few days later, the insurer approved the claim, less a $250 excess. "It was a happy ending to an unfortunate situation," Robert says. "We missed out on the trip of a lifetime, but at least it wasn’t thousands of dollars down the drain.”

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