When we think about our next holiday, we picture sun-kissed beaches, bustling city streets or peaceful countryside escapes. What we don’t tend to think about are the hiccups, flight delays, lost luggage or unexpected medical emergencies. But as many seasoned travellers know, things don’t always go according to plan.
That’s where travel insurance comes in. Often overlooked or treated as an afterthought, travel insurance is the secret to any well-prepared itinerary, a quiet but powerful safety net that can mean the difference between a minor inconvenience and a major financial blow.
Why Travel Insurance Matters:
Imagine being injured in a cycling accident in the Italian countryside or having your dream trip to Maui cancelled by wildfires. These aren’t hypotheticals; they’re real events experienced by Australian travellers, and in each case, travel insurance was the difference between chaos and calm. In Keith’s case, after his accident, emergency medical assistance was provided as part of his travel insurance, and he received prompt medical care and support while overseas. When Katie’s holiday was cancelled due to wildfires, their policy’s cancellation cover reimbursed their prepaid expenses, including flights and accommodation.
In fact, according to Smartraveller.gov.au, one in four people experienced an insurable event on their last overseas trip. In the 2018/2019 financial year alone, over 300,000 travel insurance claims were lodged, and nearly 90% of those were paid out. It’s proof that travel insurance works when you choose the right policy and understand what’s covered.
Real Stories of Travel Insurance in Action
Let’s take a look at two real stories:
- Keith’s Story – Medical Emergency in Italy:
An avid cyclist, Keith was cycling with his partner and friends in the countryside when he had a nasty fall and fractured his pelvis. Travel insurance covered his hospital treatment and arranged for his safe return to Melbourne. Without it, he could have been left with a large medical bill and complex travel logistics. - Katie’s Story – Cancelled Holiday in Maui:
Katie and her partner had everything booked for a Hawaiian getaway, only to have their plans disrupted by wildfires. Their flights were cancelled, the hotel was closed, and they were stranded without a holiday. Luckily, their travel insurance reimbursed their prepaid expenses, so they could plan an alternative escape.
Types of Travel Insurance
Travel insurance isn’t one-size-fits-all — there’s a policy for every kind of traveller and trip. The most common options are single-trip, multi-trip and annual travel insurance policies. If you’re planning a one-off holiday, a single-trip policy might be all you need. If you travel frequently, multi-trip or annual policies offer comprehensive cover for multiple journeys within a year and can save you time and often money in the long run.
Specialised travel insurance policies are also available for unique adventures. If you’re hitting the slopes, ski cover can protect you against the risks of winter sports. Planning a cruise or taking on adventure sports? There are policies designed to cover these activities, which may not be included in standard plans. Because each policy has its features, benefits, and insurance cost, it’s smart to compare travel insurance options before you buy. This way, you can find the right level of cover for your personal situation and travel style and be protected no matter where your journey takes you.
Medical and Emergency Cover
One of the most important parts of any travel insurance policy is medical and emergency cover. Medical emergencies can happen anywhere, and the costs for overseas medical expenses or hospital stays can be huge. A good travel insurance policy will cover medical treatment, emergency medical evacuations and even repatriation if you need to return home for further care.
If you have pre-existing medical conditions, you need to disclose them when you buy travel insurance. Some policies will automatically cover certain pre-existing conditions, while others will require a medical assessment and an additional premium. Always read the product disclosure statement (PDS) carefully to understand what is and isn’t covered, especially when it comes to overseas medical emergencies.
Most travel insurance providers offer 24/7 emergency assistance so you can get support and guidance when you need it most. Whether you’re dealing with a sudden illness, injury or need help finding a hospital overseas, this service can be a lifeline. Don’t leave home without knowing exactly what your policy covers — it could make all the difference in a crisis.
Common Myths That Can Leave You Unprotected
Unfortunately, many Australians rely on myths or false assumptions when it comes to travel insurance. Always check the full details in the Product Disclosure Statement (PDS) to understand exactly what is and isn’t covered. Here’s what you need to know:
Myth 1: The government will help me.
Consular staff can help you access local medical care, but they won’t pay your hospital bill or cover a flight home if needed. That’s on you — unless you’re insured.
Myth 2: My credit card insurance will cover me.
Some cards do offer travel insurance, but it usually comes with fine print, such as requiring you to spend a minimum amount using the card or excluding flights booked with points. The cover might not extend to all destinations or situations, and often includes higher excesses and fewer inclusions than a standalone policy.
Myth 3: I can just get insurance right before I fly.
Technically, yes — but if something happens before your departure (such as needing to cancel due to illness or a natural disaster), you’ll only be covered if you already had the policy in place.
Myth 4: I can just crowdfund if something happens.
Relying on platforms like GoFundMe is risky. Research by the University of Washington showed that only 12% of medical crowdfunding campaigns meet their targets, with 16% raising nothing. That’s not the safety net you want when you’re stuck in a hospital overseas.
Insurance Cost and Value
When it comes to travel insurance, the price you pay, your insurance cost, depends on several factors: your destination, the length of your trip, your age, health and the type of insurance cover you choose. While it’s tempting to opt for the cheapest policy, it’s important to look beyond the price tag and consider the value of the cover provided.
A lower cost policy might come with higher excesses or limited benefits, which could leave you exposed to significant out-of-pocket expenses if you need to make a claim. On the other hand, a comprehensive travel insurance cover may cost a little more upfront, but can save you thousands in the event of an emergency. Always weigh the insurance cost against the potential financial impact of unexpected events and choose a policy that offers the right balance of affordability and protection for your needs.
What to Look for in a Policy
When choosing a travel insurance policy, look at what’s included — and what’s not. Start by checking for coverage for unexpected events like trip cancellation, travel delays, medical emergencies and lost or stolen luggage. Comprehensive cover should also include benefits like rental car insurance excess, personal liability and protection for stolen luggage or travel documents.
Check the policy’s exclusions, sub-limits and conditions that might affect your ability to make a claim. For example, some policies have sub-limits on high-value items or specific activities. Also consider the reputation of the travel insurance provider, their customer service and how easy their claims process is. Comparing travel insurance policies and reading reviews will help you find a policy that suits your travel plans and gives you peace of mind.
International Travel
If you’re travelling overseas, international travel insurance is essential. The Australian Government recommends that all travellers purchase travel insurance that covers overseas medical expenses, hospital expenses and emergency assistance, including medical evacuation and repatriation. Medical treatment in other countries can be very expensive, and without adequate cover, you could be left with significant financial losses.
International travel insurance policies often include additional benefits like cover for travel delays, lost or stolen travel documents and personal effects. Some policies also cover additional expenses incurred due to unforeseen circumstances like natural disasters or cancelled flights. Make sure you read your policy’s terms and conditions and pay attention to any sub-limits and exclusions to ensure you have the right level of cover for your trip. With the right international comprehensive policy, you can travel with confidence knowing you’re protected against the unexpected.
What Travel Insurance Doesn’t Cover: Medical Expenses and More
Also, read your policy carefully. Many travellers assume lodging a claim will guarantee a payout, but there are common exclusions that can leave you uncovered. For example:
- Taking part in an excluded activity (like skiing without adding the relevant cover)
- Being under the influence of alcohol or drugs when the event occurs
- Leaving valuables unattended
- Travelling with a pre-existing medical condition that isn’t disclosed or covered
When making a claim, you’ll need to provide supporting documents like receipts and official reports for a successful claim. Also, check your excess, high-value item limits (sub-limits apply to certain items or claims, so review these in your policy) and how claims are processed. Knowing the details upfront makes life a lot easier if you do have to make a claim.
The Smart Traveller’s Secret Weapon: Cancellation Cover
Travel insurance is relatively cheap compared to the cost of your trip. And if things go wrong, it can be priceless. Whether you’re in Europe, Bali, or just heading interstate, travel insurance gives you the freedom to focus on what matters — enjoying the journey.
As financial planners, we want to see you plan for the future and enjoy it. When choosing travel insurance, make sure you consider your financial situation, needs and objectives to ensure the policy fits within your budget and supports your overall financial goals. Travel insurance plays a part in protecting the lifestyle you’ve worked hard to build, especially when it comes to your health, wellbeing and peace of mind while travelling.
If you’re unsure about the type of travel insurance you need or how it fits into your overall financial planning, speak with our team. We can help you travel smarter and with confidence.