Time to read : 3 Minutes
Travel Insurance Explained
Research by Smartraveller has found that one in four Australian travellers experienced an insurable event on their last overseas trip.
To help you avoid travel stress and unwanted medical bills, there are plenty of important reasons to consider getting travel insurance – saving money and accessing life-saving healthcare are two great ones.
But any insurance policy is only as good as its inclusions. To help make sure you actually have the cover you need, always check the product disclosure statement (PDS) before you sign.
Why get travel insurance?
Getting injured or sick while overseas could see you stuck with a potentially huge hospital bill, as well as the cost of flying home. Depending on your care needs and the country you’re in, that could cost you or your family thousands (and potentially even hundreds of thousands!) of dollars.
Just recently, an Australian man on holiday in Bali suffered a shock brain haemorrhage and the required medical evacuation required to fly him back to Australia for surgery came with a bill of around $250,000.
The Australian government won't pay your medical bills
The Consular Services Charter outlines what the Australian government can and can’t do to help Australians who are injured or sick while overseas.
Unfortunately, almost 70% of Australian travellers believe the government will help ensure access to medical treatment, with almost 45% believing the government will pay their medical bills. That is not true and it could see you end up with serious financial debt.
Plan early, shop around and save
A whopping 62% of people heading on an overseas holiday get their travel insurance the day before (or the same day) they are leaving. Buying early helps you access better deals, plus depending on your policy, it can cover you for events that may stop you heading overseas. And with some insurance providers not letting you take out a travel insurance policy once you’ve left Australian shores, getting your travel insurance organised early is critical.
For added protection, check asic.gov.au/afslicensing to find out whether the insurance agent has an Australian financial services (AFS) licence (or is an authorised representative of a licence holder).
If you have other insurance (such as car, or home and contents), ask your provider if they offer discounts for additional policies (including travel insurance).
Understanding the product disclosure statement (PDS)
With hundreds of travel insurance policies to choose from, understanding what travel insurance offers can seem confusing.
But when it comes to insurance and your expectations of what you hope is covered, taking the time to check your PDS is critical. To help you understand what your travel insurance includes (and what it doesn’t!), always look for the following:
the table of benefits (it’s an overall summary of your cover)
the policy cover section (this is typically split into two distinct sections: 'what we will pay' and 'what we won't pay'
general exclusions (because knowing what is NOT covered by your travel insurance is important)
pre-existing conditions (those forgotten ailments may exclude you from complete cover)
the word definition table helps you understand defined terms that relate to inclusions and exclusions (read it carefully to avoid unwanted surprises)
the claims section this is essential reading because it highlights points to be aware of (such as not admitting fault or liability if you are in an accident)
COVID-19 cover section – this sign of the times special section lists medical, cancellation and other cover available for COVID-19
write down the 24-hour emergency assistance contact number and keep it handy.
The bottom line
Paying for any insurance can seem like a gamble but when it comes to protecting your health and running the risk of not being able to access life-saving medical care, for the sake of saving a few dollars, is that a risk you are willing to take?
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Financial disclaimer
The information contained on this web page is of general nature only and has been prepared without taking into consideration your objectives, needs and financial situation. You should check with a financial professional before making any decisions. Any opinions expressed within an article are those of the author and do not specifically reflect the views of Compare Club Australia Pty Ltd.
