Travel Insurance: Your Essential Companion for Unforeseen Adventures

Misplaced luggage, health emergencies, interrupted journeys, and theft – these are some unforeseen challenges that can occur during travel. Navigating these issues can be troublesome enough at home, but they’re even more complex when you’re in a different country. To ensure your holiday remains enjoyable and free of stress, it’s wise to consider travel insurance. This serves as a financial safeguard, allowing you to handle unforeseen circumstances with confidence and ease.

A study by Smartraveller.gov.au revealed that one in four Australians encountered an insurable event during their last trip abroad. In the financial year 2018/19, over 300,000 claims for travel insurance were filed, with nearly 90% being settled in favour of the travellers – a true lifeline for those insured. Here are some real-life instances:

Medical Emergency in Italy: Keith, an avid cyclist, was holidaying in Italy with his partner and friends. While cycling through the countryside, he misjudged a turn and suffered a fractured pelvis. His travel insurance covered his hospitalisation in Italy and managed and financed his return to Melbourne.

Flight and Accommodation Cancellation in the USA: Katie and her partner had planned a holiday to Maui in August 2023. However, devastating wildfires hit the Hawaiian island just before their trip, resulting in cancelled flights and their hotel being unable to host guests. Their travel insurance reimbursed them for these pre-paid expenses, enabling them to organise an alternative vacation.

Despite Australians often adopting a ‘she’ll be right’ attitude, it’s crucial to address some common misconceptions about travel insurance:

• Government Assistance: While consular staff can help Australian citizens access local medical services, they don’t cover medical costs or repatriation expenses.
• Coverage through Credit Cards: Some credit cards provide travel insurance, but often only if the card is used to purchase return flights with a minimum spend. This might not cover you if you book flights with frequent flyer points. The excess might be higher than individual policies, and not all destinations may be covered. Pre-existing medical conditions might also be excluded, similar to standalone policies.
• Timing of Policy Purchase: You can purchase a policy anytime before, or sometimes even after, you begin your travel. However, cancellation coverage only starts after you’ve bought the policy.
• Crowdfunding as ‘Insurance’: Relying on crowdfunding for unexpected costs abroad is unrealistic. Research by the University of Washington on over 400,000 medical GoFundMe campaigns over five years found that the median amount raised was only US$2,000, with 16% raising nothing and just 12% meeting their goal. In a severe medical crisis, you would also depend on others to manage the campaign, adding to your stress.

It’s also important to understand that filing a claim doesn’t automatically ensure reimbursement. Be mindful of policy exclusions, such as activities specifically excluded (like skiing), your conduct contributing to the event (such as being under the influence of alcohol), or illegal actions (e.g., driving without a valid licence). Understanding your policy’s excess, the inclusion or exclusion of pre-existing medical conditions, and whether an item is covered if stolen while unattended is crucial.

Compared to the potential stress and cost of an overseas trip, investing in travel insurance can be invaluable!