Travel Insurance … do we need it, or not?

Well, it seems that one in six of us either don’t think they need it or simply can’t afford it.

A survey of 1000 people conducted by Quantum Market Research on behalf of the Insurance Council of Australia and Smartraveller found that 16 per cent of us now were travelling without any insurance coverage.

The key findings of the survey showed that:

• Younger travellers (under 30) were most likely to travel without insurance (60 per cent).
• Even among insured travellers, many are overconfident about their coverage and have not properly read their policy documents (19 per cent).
• The rising cost of travel is prompting more Australians to travel without insurance or to take risks that may not be covered (34 per cent).
• Most (86 per cent) travellers will find ways to keep costs down while travelling, which may increase their risk exposure.

Travel insurance is expensive, especially if you have already forked out many thousands of dollars buying your dream holiday. Since Covid 19 hit and changed the world forever, travel insurance policies have risen by at least 35 per cent.

I am in the market at the moment looking for the best deal possible to cover us for a trip to Bali later this month and a trip to the United Kingdom in September and October, plus multiple domestic journeys.

Here’s what Go Insurance quoted for an annual two-person multi-trip policy. The Go Basic policy is $1,018.91, the Go Plus policy is $1354.67, and the Go Elite policy is $1458.88. That’s with travel to the USA, Canada and Mexico excluded. Also excluded is any cruise or any snow activities. Each level of insurance offers increased coverage for things like lost luggage, hospitalisation and travel delays. The more you pay upfront, the more you can potentially claim.

Buying an annual policy saves you money and you do have access to those cancellation benefits that become available as soon as you buy the policy. That means if you have to cancel your trip at any time you may be able to claim back some of your holiday costs.

Kim Culyer is from Travel Creators. Kim was the original, and the best, Doc Holiday columnist in the Sunday newspaper Escape sections. Here’s what she has to say about keeping the price of insurance down as much as possible.

“If you are likely to do more than one trip in 12 months, an annual policy will be more economical,’’ she said.

“Skiing and cruising are now add ons to a travel insurance policy, so be sure to specify if you need them included.

“Some companies allow you to adjust the amount of ‘on snow’ days so you don’t pay for the additional snow sports cover when you don’t need it.

“Certain policies allow you to remove sections you may not need or want cover for like legal or car hire, saving you money.’’

It’s easy to see why people think they can get away without travel insurance. I travelled the world for five years straight as editor of the Escape section. I was away for about 190 nights of the year, and never need to make an insurance claim. Having said that though, I would never travel without insurance. Why? Well, if you find yourself admitted to an American hospital for two weeks it could cost you upwards of $100,000 in fees.

Thankfully, my wife, only ever needed her insurance once when she got gastro at Whistler while we were skiing and needed to be admitted into hospital and put on a drip for a few days. We had to pay out several thousand dollars for her treatment but got it all back within days of making the claim.

Obviously, the first thing you need to do before buying travel insurance is to shop around. You probably already have some insurance linked to a credit card, but you will need to read the fine print to see exactly what it covers. More often than not, it won’t be enough. Contact your bank, and the attached insurer, as sometimes it is possible to pay extra to improve that coverage to make it meet your needs by paying extra.

You can lower the price of any quote by increasing the excess levels. And you can manipulate the excess levels to suit your needs. You might want zero excess on medical coverage, but you might be happy to pay the $500 of any claims on lost luggage. Work out what is important to you and adjust the policy accordingly.

If you are planning on renting a car, look for travel insurance that includes hire-excess benefits. Most car hire companies charge around $30 per day to reduce the excess on your rental. We are hiring a car for 21 days in the UK, so that would mean having to pay an extra $630 for the car hire. If I can get that covered as part of my travel insurance, then I’m in front.

And lastly, check for membership perks. Health funds, phone companies, shopping chains and banks offer deals to their customers all the time. For instance, Bupa offers existing customers a 15 per cent discount on travel insurance. It may still not be the best deal in the market, but it is certainly worth looking at.