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So what actually is travel insurance and what should you be looking for in a policy? 🧐
If you're planning a trip, you might be wondering about something that's not exactly as exciting as booking flights or finding the perfect AirBnB, but – according to the Australian government’s Smart Traveller website – is actually just as important: travel insurance.
We know what you're thinking. Insurance is boring, right? It's like watching paint dry, or untangling headphones, or trying to get through a whole zoom meeting without looking at your phone. But trust us: when a chance situation occurs, travel insurance can be the unexpected hero of your trip.
First things first: read the policy in full to find out what the PDS does and does not cover. You don’t want to get caught out overseas for something you’re not insured for, such as having an accident when riding a motorbike if you’ve not got the correct licensing requirements or insurance add-ons.
When reading, it’s important to check the fine print to see what the benefits are, along with any limits or sub-limits that may apply. In addition to any benefits, policies all contain conditions, limitations and exclusions, which may apply in different circumstances depending on each individual situation.
If you're in doubt or are struggling to understand some of the wording, you can always contact us for details and we can answer basic questions. If you’re unsure whether the policy is right for you or your particular situation, we suggest you speak to your own insurance broker or financial advisor. You may be able to find someone at NIBA: the peak representative body for the intermediated insurance industry in Australia.
That being said, there are a few major “safety nets” that most travel policies will cover. These include:
One of the key perks of travel insurance is medical coverage. If you happen to catch a nasty bug when you’re road tripping around Taiwan, or you break a limb while hiking through Albania’s Accursed Mountains, travel insurance may offer protection against the expenses you incur getting yourself back to health. Freely, for instance, offers unlimited* medical coverage when you’re on the road: though this is restricted to 12 months cover from the date of onset, and on approved claims only.
Medical coverage is particularly important in countries where the cost of medical attention can be expensive (here’s looking at you, United States!) Travel insurance provides benefits that may help with the cost of your medical treatment and hospital stay, along with the expense of transporting you to safety in case of an emergency.
If you have a pre-existing condition, though, do note that medical coverage can get a bit more complicated. Be sure to read the PDS in full, and it is also important to disclose and declare your pre-existing medical condition to see whether or not you can obtain coverage for any issues that may arise – directly or indirectly – as a result of your condition while you’re travelling. If you have questions or concerns around your fitness or level of health when it comes to travelling, speak to your usual doctor to make sure you get the right advice before you hit the road!
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When part of your holiday gets cancelled, it can really suck – especially if you’ve not even left home yet! Travel insurance may help cover the cost of your trip if you have to cancel for unexpected reasons, such as illness, injury or a family emergency. In the age of COVID-19, this is especially important. Some policies will need to be booked in advance for you to benefit from trip cancellation coverage, so again, read the fine print.
Travel insurance may also provide coverage if your luggage is lost or stolen. This can include reimbursement for the cost of replacing your bag and its contents up to the limits and sublimits set out in the PDS. It may also reimburse you for some essential items of clothing and toiletries you have to purchase while waiting for your luggage to be returned (such as your undies!).
Travel insurance may provide coverage for certain expenses when your plans go awry. This can include the cost of emergency cash transfers, last-minute travel arrangements and legal assistance. If, for example, a group of cheeky monkeys run off with your passport and wallet in Bali, emergency assistance might really help you out. It may even provide coverage for unexpected costs such as emergency accommodation, transportation and meals.
As for protecting all your other stuff? At Freely, we let you choose additional cover based on your needs. Got a really (like, really) expensive camera? We understand completely, and you can add our Specified Items Boost to give your prized item greater protection.
Once you’ve decided what policy you’d like to take out, you will also want to check what the excess payment will be should you make a claim. Excess is a small amount that gets deducted from the payout of any claims you make that get approved.
For example, say your passport gets stolen from right under your nose on the metro in Germany, and you want your insurer to cover the cost of getting an emergency passport from the Australian embassy there. If your claim is approved, you’ll have to contribute a small amount to the cost of your insurer reimbursing you – which is still way better than covering the whole cost of the passport on your own, right?!
Different policies will have different levels of excess, so make sure you find one you’re comfortable with.
The short answer is right away. Especially during the current COVID-19 pandemic, your level of cover can be affected when you purchase your insurance too close to your leaving date. Freely’s article on timing your travel insurance digs deeper into this!
* On approved claims only, and cover will not exceed 12 months from onset of the illness or injury.
Disclaimer: Limits, sub-limits, conditions, and exclusions apply. For full details on exactly what’s covered by Freely travel insurance always refer to and read the Combined FSG/PDS. The information contained in this article is indicative only and provides general information regarding likely coverage under the relevant terms and conditions of a policy. All claims are assessed in accordance with your level of cover together with the terms and conditions set out in the policy of insurance. Insurance is administered by Cover-More Insurance Services Pty Ltd (ABN 95 003 114 145, AFSL 241713) on behalf of the product issuer, Zurich Australian Insurance Limited (ABN 13 000 296 640, AFSL 232507). Any advice is general advice only. Please consider your financial situation, needs and objectives, and read the Combined FSG/PDS before deciding to buy this insurance. Visit freely.me for a copy of the Target Market Determination for our products.
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