Travel insurance

The Cook Islands and Australia are the most popular travel destinations. While some travellers are going further afield to avoid the New Zealand winter.

We surveyed premiums for comprehensive travel insurance policies offered by 11 companies. We also asked insurers what Covid-19 situations are covered.

All policies covered emergency healthcare, personal liability and belongings that are lost, stolen or damaged.

Cover for Covid-19

Travel insurance policies vary on the level of cover they provide for Covid-related events.

American Express and Tinz have an exclusion for Covid-related events.

The other nine policies we surveyed have some added benefits for Covid-related events.

If you get Covid-19 before you leave for your trip and can’t travel, eight of the policies we surveyed, for a trip to Australia or the US, will cover you.

It’s a different story if you need to return home because a relative has Covid-19. Only Air New Zealand and Cover-More will get you home. Southern Cross will cover you if your immediate family member has been hospitalised from Covid-19.

If the person you’re intending to stay with overseas gets Covid-19 and is isolating, six policies offer some cover to put you up elsewhere.

However, two of those policies – Air New Zealand and Cover-More – will only do so for travellers to Australia.

Southern Cross will cover alternative accommodation if the person you intended staying with is hospitalised or has died from Covid-19.

If you can’t board the plane because of a positive Covid-19 test, all policies except 1Cover, American Express and Tinz have some cover.

Yet if you’re a close contact of someone with the virus and can’t board, only AA International, Kiwi Holiday, Mix & Max, Tower and WorldCare will fork out.

If you get Covid-19 while travelling, don’t bank on the medical benefits of the policy covering you. Tinz and American Express won’t cover any Covid related events.

The other nine insurers we surveyed will, provided you’re not travelling against the advice of the government.

If a ‘do not travel’ advisory is issued here – or in the country you’re holidaying in – you won’t be covered for Covid related medical bills by any of the insurers we surveyed.

If your journey is disrupted because you have Covid-19 and you have to find alternative accommodation, the policies underwritten by Allianz Partners (Kiwi Holiday, WorldCare, AA, Mix & Match, and Tower) offer limited cover. You can claim $200 a day for accommodation and food, up to $1400.

Air New Zealand and Cover-More will cover additional transport, accommodation and food, if you’re diagnosed by a doctor, unless you’re on a cruise. Southern Cross will also cover changes to travel plans because of a Covid diagnosis.

No travel insurance policy will cover you if you haven’t followed the vaccination and testing requirements for all airlines you’re booked with. Each country you’re planning to visit may have different vaccination and testing rules, too.

A spokesperson for the Insurance Council of New Zealand Te Kāhui Inihua o Aotearoa (ICNZ) said it’s the customer’s responsibility to meet any conditions of boarding.

“This has always been the case, for example when needing to turn up with appropriate visas.”

The ICNZ is also warning travellers that insurance policies generally don’t cover government-imposed border closures, which may affect whether you can leave or return to New Zealand.

What to consider

You can buy travel insurance online or over the phone from travel agents, banks and individual insurers. There are common questions you’ll encounter when taking out an insurance policy.

Where are you going?

Insurers ask about your destination as the chances of you making a claim (or the cost of claims) are greater in some countries. When shopping for policies, you may discover some insurers lump destinations together in regions such as the Pacific, Europe and “Worldwide”. You may need worldwide cover if you’re stopping off in multiple regions or travelling to certain countries (often the US and Canada).

How long are you going for?

The duration of your journey is a major factor in how much your insurance costs. The longer you’re away, the more you’ll pay. Most of your policy’s benefits, such as cover for your belongings, are triggered on the day you depart. But cover for your prepaid expenses begins when your policy is issued. So it pays to take out insurance as soon as you’ve booked your trip.

How old are you?

Older travellers are charged a higher price as the likelihood of making a claim increases with age. Some insurers require older travellers to complete a medical assessment; others won’t cover travellers over a certain age. “Dependent children” (the definition varies depending on your policy) may be covered for free when they travel with an insured adult.

Do you want a high or low excess?

If you make a claim, you may have to contribute some money towards covering your loss. This is called the excess. A typical excess is between $100 and $500. Some insurers let you increase your excess in exchange for a lower premium, or vice versa.

What are you going to do on your trip?

Insurers won’t necessarily cover your participation in sports events or adventure activities such as rock climbing. Some charge extra to cover ski trips. Check your policy to ensure your pursuit is covered. Claims relating to mopeds or motorcycles may also be rejected if the bike has an engine over a certain capacity – often 200cc – or you don’t have a helmet, or a valid motorcycle licence for the country in which you’re travelling.

Pre-existing conditions

A pre-existing condition is a health issue you had before taking out insurance. Typically, insurers won’t cover pre-existing illnesses or injuries (or any problems linked to them) unless you clear it with them first.

Some insurers have a list of conditions – such as coeliac disease, epilepsy and hypertension – that they automatically cover provided everything’s well controlled (for instance, you haven’t required hospital treatment in the past year). Even if your condition’s not on the list, you might be able to get cover if you pay extra. If cover for your pre-existing condition is available, don’t travel without it. A massive overseas medical bill isn’t the souvenir you want to bring home.

Activities

Insurers won’t necessarily cover your participation in adventure activities, such as scuba diving and rock climbing. Some charge extra to cover ski or snowboarding trips. When you’re booking, check the policy to see which pursuits are automatically covered, which you must pay extra for and which are always excluded.

Valuable items

All the policies we looked at cap cover for individual items. Although you may have paid $3000 for a smartphone, 1Cover, American Express, Kiwi and Tinz insurers will only pay out $1000 if it gets stolen. Usually you can upgrade your cover for individual items, but you’ll pay extra for the privilege.

Excess

If you make a claim, you’ll normally have to contribute some money towards covering your loss. This is called the excess. If you’re happy to cover the small losses yourself, some insurers allow you to increase the excess in exchange for a lower premium. Others let you choose a lower (or nil) excess, but you’ll pay more.

Policy type

You’ll usually choose between comprehensive and budget travel insurance. Comprehensive policies are more expensive but have higher limits, and often provide cover in circumstances where budget policies won’t pick up the cheque.

Some insurers also offer multi-trip policies, which cover all overseas trips within a year (provided each journey doesn’t exceed a certain length). These policies cost more initially, but are worth considering if you have a busy year of travel planned.

Destination

In some countries, the chances of you making a claim – and the cost of claims – are greater.

You need to inform your insurer of all the countries you’re intending to visit, even if it’s just for a brief stopover. If you forget to do so while booking or you extend your travel plans, give your insurer a ring.

Policy types

Insurers sell different policy options, such as comprehensive or budget cover. Some premium credit cards also come with built-in travel insurance. So which should you choose?

Comprehensive vs budget travel insurance

Most insurers offer comprehensive and budget travel insurance. Comprehensive policies are more expensive, but they have higher cover limits and provide cover in circumstances where budget policies don’t. If you can only afford a budget policy, make sure it covers medical expenses and personal liability (in case you accidentally injure someone or damage something).

Single-trip vs multi-trip travel insurance

Most travellers heading overseas will be well served by a single-trip policy. But if you’ve got multiple trips planned in the year ahead, you may save money with a multi-trip policy. These provide cover for unlimited trips within a 12-month period. Drawbacks? Each trip is restricted to a maximum period – for instance, 60 days.

Credit card travel insurance

Some premium credit cards (think gold or platinum) have built-in travel insurance. Credit card travel insurance has similar benefits and limitations to comprehensive policies. There are additional fish-hooks to watch for:

• You must activate credit card travel insurance before departing. Each provider has different activation requirements. You may need to use your card to pay for your flights or a percentage of your trip’s expenses. You won’t be covered if you don’t meet these requirements.
• Your card’s insurance only covers your trip up to a maximum length – for example, 40 days. Most insurers will extend the period of cover for a fee. If you book travel well in advance, be aware some cards only cover you for a maximum of six months before you depart.
• Credit card insurance policies tend to exclude pre-existing medical conditions by default – unlike some comprehensive policies, which list automatically covered conditions. However, the insurer may agree to cover your health conditions if you complete a health assessment and pay an additional amount.
• You may have to pay a higher excess when making a claim. Where most other policies have an excess of $100, credit card policies often have a fixed excess of $200 or more.

What's covered?

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:

• Costs for transporting you to the hospital, via ambulance or airlift.
• 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:

• You're taken to a private hospital instead of a public one (so check your policy).
• Your injury or illness was caused by a medical condition you suffered from before you travelled
• 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 (unless that's what your insurer advises).
• 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. 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 $8000, whereas others pay up to $30,000 if all your luggage goes missing.

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.

There are lower limits for individual items. For instance, your laptop may only be covered up to a maximum of $4000.

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.

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 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.

Note: Planning to use Airbnb for accommodation? Check your travel insurer gives you the same protections for temporary rentals, such as Airbnb or HomeAway, as it does for a hotel room. Typically, travel insurance will cover you for any damage you cause to a hotel, up to a limit of between $500,000 and $5 million. However, while some insurers treat all temporary accommodation similarly, other insurers make an exception for peer-to-peer rentals. Under Airbnb's terms, guests are legally responsible for all damage caused to the host's home, even if the host has home and contents insurance. If you want to be sure you're protected, speak to your insurer.

Who to call if things go wrong

If your trip goes pear-shaped, whether it’s a missed flight or a broken leg, call your travel insurer immediately if possible – even before or while you’re on your way to the hospital.

All travel insurance policies contain pages of exceptions or nuanced caveats, many you’re unlikely to remember in a crisis (even if you read the document carefully before departure).

Think of this phone call as insurance on your insurance. The company rep will be able to let you know what you’re covered for and any key exceptions that may apply – and the insurer will have to stand by this information.

Pre-departure checklist

• Buy travel insurance as soon as you make your first booking. That way you’re covered if circumstances change and you need to alter your travel plans (though you’ll need to note any policy exclusions).
• Declare any pre-existing conditions. It will likely cost extra to get cover for pre-existing conditions but it could save you hundreds of thousands in medical bills. Make sure to include old injuries as well as illnesses, and the health conditions of any close family staying at home.
• Read the terms and conditions and check the limits carefully. Pay close attention to the exclusions. If you don’t think the policy is suitable, see if there’s a cooling-off period, where you’ll be able to get your money back if you change your mind (providing you haven’t departed or made a claim).
• If in doubt, ask your insurer. If you have any questions, phone your insurer and check – and keep a record of the call, who you spoke to and what they said.
• Check the latest travel advice for your destination. Visit the Ministry of Foreign Affairs and Trade’s website safetravel.govt.nz. While you’re there, register your travel details.
• Print a copy of your travel policy with any emergency assistance numbers. Keep a copy in your hand luggage.
• Photograph your belongings (especially any valuables) as you pack. If something goes missing, you’ll have to prove ownership. Taking a photo is often easier than tracking down an old receipt.
• Pack expensive items, including cash and electronic devices, in your hand luggage (if the rules allow). Some policies refuse to cover valuables in your checked bags.

While travelling

• Use the room or hotel safe. Insurers won’t pay for unsecured valuables and may deem expensive items, such as laptops or jewellery, left in your hotel room fall under this description.
• If you make a large purchase on holiday, contact your insurer. Ensure you can add this on to your current policy.
• Call your insurer ASAP for any claim, big or small. Insurers commonly require you to get large expenses – such as big hospital bills – pre-approved.
• If something is lost or stolen, let the service or police know as soon as possible. Many insurers require you to file the official paperwork (whether the airline loses your bag or someone steals your wallet) within a set time, for example 24 hours.
• Keep all receipts and documents related to a claim. Insurers will want as much paperwork as possible, even small receipts for meals if your flight’s been delayed.

When filing a claim

• Always tell the truth. Small “white lies” could see your claim refused and could have an impact on your ability to get insurance in the future.
• If declined, argue your case. Some claims fall into a grey area – such as how long you have to leave a bag for it to be “unattended in a public place”. It can be worth asking your insurer to reconsider. Alternatively, if you’re a Consumer NZ member, you can call our advice line about your case.
• You can ask for an independent review. If you have a dispute with your insurer, you can take a complaint to its independent disputes resolution service. Travel insurers belonging to the Insurance Council of New Zealand are bound by its Fair Insurance Code.