Why you need the right travel insurance

Photo by RAYMOND Wong on Unsplash

Lisa Kable presented this session at the Bangkok AGM in 2018.

Insurers want people to travel overseas with not just travel insurance but the right travel insurance.

To reduce the lethargy or confusion associated with researching travel insurance policies, insurers are designing their websites and policies to be straightforward, easy to understand and compare. Many comparison tables of policy inclusions are visual making it easier for travellers to choose the policy that best covers the important elements of the international trip being taken.

Let’s take a look at our globetrotting fellow Australians and how they insure or don’t insure themselves.
• 10.7 million travellers departed Australia in 2017/18
• 9,523,000 (89%) travellers had travel insurance
• 1,177,000 (11%) travellers didn’t have travel insurance
• 4,190,000 travellers with travel insurance took part in one or more risky activities not covered by travel insurance
• 153,000 (13%) of travellers without travel insurance expected the Australian Government to contribute to their medical expenses (it doesn’t)
• 2,033,000 travellers with a pre-existing medical condition didn’t check if their insurance covered the condition
• In 2015/16*, 168,658 Australians who travelled overseas experienced an insurable event but were left out of pocket as they didn’t have insurance.
Let’s look at the 1,177,000 uninsured travellers and ask why didn’t they buy travel insurance?
• 28% well they just didn’t think about it
• 21% were uncertain they needed it
• 14% just didn’t get around to it
• 20% said it was too expensive

Let’s now focus on the four million plus Australian travellers that engaged in what insurers consider a risky behaviour.
Risky behaviours include but are not limited to:
• Riding motorbikes, mopeds, scooters, quad bikes
• Skiing & snow sports
• Water sports
• Extreme sports including polo and hunting
• Consuming excessive amount of alcohol
• Taking illegal drugs
• Cosmetic surgery
• Some policies also consider sailing on a private vessel in international waters as risky.

Some of these risky behaviours can be covered as a policy add-on.
The 18-29 age group were mostly likely to engage in risky behaviour, the figure is about 82% did engage in one or more risky behaviours while travelling overseas.

Reasons a travel insurance claim may be declined:
• Excessive use of alcohol led to the claim
• Use of illegal drugs led to the claim
• Carelessness, leaving items unattended
• Undeclared pre-existing medical condition
• Undeclared pre-existing mental health condition
• Undertaking the already mentioned risky behaviours without the RIGHT cover
• Travelling to countries that have a current DFAT do not travel warning
• Lodging a claim for something not covered, a reminder to invest in the RIGHT travel
insurance policy for example stolen skis or golf clubs which count as specialty items
on some policies
• No accompanying paperwork; police reports, receipts
• No proof of ownership, keep receipts or take photos of items you have owned for a
• Claims not made within 30 days of returning from travels
• Not all destinations were included on the policy, always include stopovers
• Didn’t have a valid license to drive overseas
• Weren’t wearing the appropriate clothing or equipment, no helmet on a bike

How to choose the right travel Insurance;
1. Think about the activities and the style of holiday, invest in the right type of cover
2. Don’t be swayed by price, if the right policy isn’t purchased, if it doesn’t cover the traveller
for their specific trip needs, it’s the same as not having insurance but more expensive.

Travel Insurance and mental health
To assist Australians who may find themselves suffering from a mental health condition most
travel insurers have removed blanket exclusions and offer cover for first-instance episodes.
Many insurers will cover pre-existing mental health conditions on an individually underwritten
basis, similar to coverage available for pre-existing medical conditions.
The travel insurance industry is working with governments and other organisations to
improve travel insurance availability and options for mental health sufferers.
According to the Black Dog Institute about 45% of Australians are likely to suffer a mental
health condition in their lifetime.

Travel insurance and Terrorism
When it comes to terrorism-related events, travellers do need to check the PDS of their
policy, as the wording and cover varies. Look for cover for injury as a direct result of
terrorism, repatriation as a direct result of terrorism and cover for cancellation costs as a
direct result of terrorism, each item can be included or excluded depending on the policy.
When preparing your travel plans and before you leave, you should visit Smartraveller to
familiarise yourself with advice about your destinations.

Travel Insurance and natural disasters
Claims for losses due to natural disasters that are known events are never covered.
*Last time the survey was conducted. Travel Insurance Behaviour Survey

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