Travel Insurance essentials

As we learn how to live with Covid, more and more people decide it is time to start moving around.  

We love our holidays, we love to travel, and we love visiting new places, but travel doesn’t always go as planned, therefore you need to prepare in advance, take precautions so you do not suffer financial loss when things go wrong.  

In this video I am not going to be comparing any particular policies or any products, but rather give you an indication as to the cover you should consider as your financial security when you are creating your travel plans. 

Then you can do your due diligence and compare which products suit your needs best.  

“The world is a book and those who do not travel read only one page.”
Saint Augustine 

Well, I don’t know about you, but I sure love to travel. As a child my mum used to call me a little gipsy, as I used to be such a free-spirited child, wanting to see the whole world and discover how people live in different parts of the world.  

My free spirit is still there, but now with being a bit older and with life experience, I know very well that spontaneous travel sounds great, but may not end so well.  

As we get older, we have so much more to lose, hence I am not willing to risk, the life I have built over the years if I can protect it, and that also includes my travels.  

You can get your travel insurance in two ways: 

• purchase a travel insurance policy from specialised travel insurance providers – please compare companies and what their travel insurance covers, as there are big differences not just with premiums payable, but with benefits covered within policies.  
• use your insurance cover provided by your credit card provider, if it is included in the product. Some more expensive “comprehensive” credit cards come with “build-in” travel insurance, providing that you pay for all your travel with that particular card, but please check all the details before deciding that such cover is sufficient for you or your family.  

Then there are companies that specialise in International Travel Insurance or Domestic Travel insurance. If you are not sure, just speak with your travel agents.  

The parts of travel insurance you need to pay attention are: 

1. medical cover
2. cover for your personal effects
3. travel disruption
4. car hire cover
5. life insurance and disability cover 

So let’s discuss them one by one:

1. By far the most important part of your travel protection is medical cover – insurance for your health and cover for all medical expenses, especially when you travel overseas. Most countries won’t give you free care, and healthcare costs overseas can be very expensive.  Your policy should provide benefits such as: 

• Medical emergency treatment and emergency assistance 
• General medical assistance and cover for medical bills 
• transport to hospital by helicopter or ambulance. 
• Medical evacuation back to Australia.
• Cover for injuries and accidents, unless the injury is from an excluded activity. 

An example of excluded activity could be a broken bone, that most policies would normally cover, however, if you broke your leg skiing and your cover specifically excluded skiing, you won’t be covered. 

And please be aware that most insurance policies will not cover you at all, if you decide to visit a country with a ‘Do not travel’ warning, so be aware of travel alerts if you consider countries with medical or political issues, and then change your travel plans as needed.  

Also be aware that some policies might exclude your pre-existing medical condition, so if you have a heart issue for example, you either have to find a policy that does not have such exclusion or pay extra to have your condition included in your policy if possible.

2. Cover for your belongings and your valuables – this is the cover for your items that could get lost, stolen or damaged during your travel. Some insurance companies will help you organise a replacement which you are travelling. 

So what items can be covered by a policy: 

• electronic devices – smartphones, computers, cameras – if you wish to cover those items above the specified by the policy value, then often you can increase the cover and pay additional premium.  
• your luggage and personal property  
• cash – but usually a very small amount is covered 
• sports equipment – this could be an additional cover, so I know that when I take my hiking equipment on the plain, I need to have specific cover for some expensive items as an extra  

3. Travel disruption cover – if your plane is late and you missed the connection, or you get sick and new travel arrangements need to be put in place, your policy should cover any additional costs suffered.

4. Car hire - please be aware that your own car insurance does not cover any car hire when you travel. 

Car hire companies usually have two versions of renal agreement:  

• with no protection and  
• with a full protection.  

And it is charged based on number of days you hire the car. The difference in price is quite staggering, often the full protection is an extra charge of 100% or more of the base premium.  

But did you know that often that extra protection charged by the car hire companies, specifically the rental vehicle excess, is what you can have included in your travel insurance at a much lower premium? 

So please compare those policies as see what is included in your travel insurance contract. You might be surprised that you do not have to pay those high charges from car hire companies, as the cover could be automatically included in your travel insurance contract.  

5. Life insurance and disability cover – this could be included in your travel insurance contract, usually it is a standard level of cover, and not subject to increase or decrease, but if this is an important cover for you to have, then make sure you find a contract that automatically provides death or disability cover within the policy, or purchase a life insurance and disability policy directly from the life insurance company here in Australia before you leave.

So, enjoy your travel, but for added peace of mind, make sure that you have included an appropriate cover within your travel insurance plans and you have allowed for cost of your travel insurance as well.  

By: Katherine Isbrandt CFP®
Money Strategist & Retirement Planner
Principal of About Retirement