Why purchase travel insurance?

There are many things to consider when travelling overseas including passport, tickets, exchange rates, accommodation, and what to pack. While overseas travel can be an exciting prospect, there can be situations where things may go wrong and travellers find themselves needing urgent medical assistance, help with replacing lost luggage and/or assistance with making an urgent trip home. This is where Travel Insurance can help – along with providing peace of mind for travellers who may find themselves in any of these situations. Travellers should thoroughly read the policy before they purchase travel insurance to ensure it meets all their requirements and provides the appropriate level of cover.

We've all heard the horror stories of people losing their money, passport, sometimes their entire luggage, leaving them stranded far from home. Or worse, being injured or just getting sick in the wrong part of the world.

My credit card is offering me free cover – why should I pay for travel insurance?

Carefully read the fine print when you see advertisements offering free travel insurance when you pay for the trip with your credit or charge card. This is not always comprehensive travel insurance that you are being offered. Insurance will usually be provided to the individual cardholder and will cover any immediate family if they were travelling together, if their travel itinerary is identical or, in some cases, if it is very similar. To qualify for the insurance, cardholders need to either purchase the return airfare on their credit card or spend a certain dollar amount while overseas.

It is not safe to assume that the cover is deluxe quality and comprehensive because it is attached to a premium card.

What is ‘Cancellation’ cover?

Cancellation Cover applies to lost deposits and cancellation fees for pre-paid travel arrangements due to unforeseen circumstances neither expected nor intended by you or which are outside your control.

There is provision to claim for cancellation of your trip for a variety of reasons including becoming redundant, being called for jury duty or the death of a close relative, sickness, accidents, and natural disasters. However if you merely change your mind about your trip, there is no cover.

A travel insurance policy should provide cover for the entire duration of the trip. But it may be a good idea to consider adding a couple of extra days to the policy so that cover is available if there are delays or cancellations, or if travel plans are changed.

Why is insurance for medical treatment a good idea?

The average hospital bed in the United States is approximately $2,000USD /day. The cost of repatriation from anywhere in the world is at least $50,000AUD.

What is a pre-existing medical condition?

It can be any physical condition, illness, or disease that existed in the period before taking out the travel insurance policy. That includes any chronic or ongoing medical condition. As part of the Duty of Disclosure an insured is required to provide details of their medical condition. Refer to the PDS (Product Disclosure Statement) for information.

I am pregnant, am I covered?

You will need to refer to the policy wording of each policy you are considering, as some exclusions apply with pregnancy.

Is there an age limit on travel insurance?

There's usually an upper age limit. But insurers are aware of the fact that more and more of our older citizens enjoy international travel - and also that many are fitter than travellers half their age. Some budget-priced travel insurance policies place limits on travellers over 50, with cover ceasing at age 65. However, most travel insurers only ask for a Traveller's Appraisal Form, which details the customer's state of health, when they are aged 70 or more.


I’m planning to take my video camera and sound equipment with me, are they covered?

The amount paid for loss of video, camera or sound equipment will depend on the insurance policy, but there is a maximum single amount. It's usually about $3,000 to $4,000 but refer to your individual policy wording.

I was robbed of $300 in local currency. Do I have a claim?

There is a nominal limit to the amount the insurer will reimburse following the theft of cash whilst travelling overseas. It's always safer to use traveller's cheques or credit cards.

What are some good features to look for in a travel insurance policy?

There is a very wide variety of travel insurance policies available. They all have their good features, and they all apply various restrictions. It's important that you know what you want covered, and understand what your policy actually covers you against.

We've all heard the horror stories of travellers injured in places like the United States or Europe, where a hospital bill for a relatively minor condition can exceed $50,000. In such circumstances, the insurance premium is a worthwhile investment.

Travel is one of the most hotly contested classes of insurance when it comes to claims. The Insurance Ombudsman Service, the insurance industry's dispute resolution system, reported that the majority of disputed travel claims revolved around what the policy intended to cover and how much goods claimed for really cost.

Read through the available policies very carefully, taking into account where you are going, what you are likely to have with you and what the costs are likely to be in case of injury.

Don't take out the first policy you're offered without understanding what it contains. And don't leave your travel insurance to the last minute because the choices on offer are quite wide.

Most policies offer cover for singles and partners. These policies generally cover children travelling with you, however in each case you should refer to the policy wording.

What travel insurance should generally cover:

· Medical and additional expenses
Including cover for the costs of medical, surgical, hospital, ambulance, emergency dental, medical evacuation and additional expenses.

· Cancellation
Cover for cancellation charges on prepaid arrangements.

· Luggage and personal effects
This provides cover for personal belongings that are taken on the trip or purchased during it. Note that there is usually a limit per item, with an overall limit for electronic equipment like cameras and personal computers.

· Travel documents
Cover for travel documents, credit cards or travellers cheques that are lost or stolen. There is usually a limit - either per item or overall.

· Personal liability
Cover against possible claims arising from injury accidentally caused to another person or damages their property. In some parts of the world, the liability can be huge.

· Return airfare
Some insurers offer to reimburse the cost of the airfare in case of an accident or you need to return home due to a covered event outside your control.

· Travel Delay
Reimbursement for additional meals and accommodation expenses if the journey is delayed for more than a certain number of hours. Delays due to industrial action and - even worse - weather are far more common than you might think.

· Emergency luggage
Reimbursement for purchases for essential items if luggage is temporarily delayed by the carrier.

· Accidental death
Limits usually apply, ranging from $10,000 to $25,000, depending on the type of policy.

· Resumption of journey
If you have to return home early due to the unexpected death of a relative, some insurers will offer cover for the costs of resuming an overseas trip. Note, however, the word "unexpected".

· Out-of-pocket expenses
Provides spending money for each day that you are confined in an overseas hospital.

· Loss of income
Some policies provide a benefit ranging from $5,000 to $25,000 if you have an accident on a trip and are unable to work when you return home.

· Domestic pets
Cover for kennel and cattery fees if you are caught up overseas by injury or an unforeseen delay.

· Rental vehicle insurance excess
Provides cover for the insurance excess on a rental vehicle if it is involved in an accident or stolen.

· Cover for children
Some insurers offer coverage for dependents under the age of 21, accompanying the policyholder, at no additional cost.

· Amateur or action sports
For anyone partial to skiing, ice sports, hot-air ballooning, scuba diving, bungee jumping, white-water rafting, parachuting, paragliding and so on, on their holidays, look for a policy that offers specific cover for amateur or action sports. The policy will define exactly what is covered. If your favourite activity isn't on the list, ask your insurer.

What’s ‘due care and attention’?

If you leave your hand luggage unattended in a public place (outside the toilet at the airport, for example) and it disappears, your insurer may reject your claim, as you haven't paid due care and attention to your goods.

Equally, if you leave your luggage with somebody you don't know – for example at the airport while you buy a cup of coffee – that, too, is not giving due care or attention.

This duty of care spills over into your baggage and rented cars. Most policies will not pay if your luggage is stolen from your rented car when it is left in the boot overnight. Insurers can refuse the claim if it is stolen from the main part of the car.

What is a Duty of Disclosure?

Under the Insurance Contracts Act, the insurer is required to inform the insured about their Duty of Disclosure. The insurer will ask various questions and the insured has a duty at law when answering them to give honest and complete answers and to disclose everything they know and that a reasonable person in the circumstances could be expected to tell the insurer.

The insured answers the questions for themselves and everyone else covered by the policy, because the insured applies on their behalf and with their consent. If the insured breaches the duty, the insurer may cancel the policy or refuse to pay the claim or reduce the amount it pays for a claim. If fraud is involved, the insurer may treat the policy as if it never existed and pay nothing.

Does insurance only provide cover for the one trip?

Usually insurance is taken out for a period of time. Most insurers offer unlimited trips for the duration of the policy. Refer to the individual policy brochures.

How do I obtain help from my insurer while I am overseas?

Many insurers provide a phone number you can call from anywhere in the world that will give you assistance. Enquire with your potential insurers to see which ones offer this service, because it can be very useful when and if the need arises.

Should I obtain police reports or doctors' details for insurance purposes?

We know it cuts into your valuable holiday time, but there it may be much harder trying to obtain such vital information once you have returned to Australia. Get the information you need as soon as possible, and store it in a safe place.

My golf clubs were lost by the airline, so I had to hire some. Can I make a claim?

Refer to the individual policy wording. Some insurers accept that sporting equipment - particularly skis and golf clubs - are normal holiday equipment for some people. So they will pay the necessary cost of hiring replacement equipment, usually up to a limit of $150 to $300. Of course, claims need to be supported with receipts.

If I decide to return home because I am ill, do I need the insurer's agreement?

Yes, whatever the circumstances. If you intend to do something that you will claim for later, you first have to obtain your insurer's agreement.

Should I suspend my private health cover while I’m away?

If you are going away for a long period, it may be worth contacting your private health insurance to see if this is worthwhile. Some health insurers will allow the suspension for anything from two weeks, but the amount of time and effort would probably make this an expensive exercise. But if you're going away for two months, then it maybe is a worthwhile consideration. You need to prove you are out of the country for that period with documentary evidence such as your passport and your ticket.

Refer to your private health insurance provider for more information.

Are there any no-claims bonuses?

Mostly, travel insurance is a one-off thing, so if you have to make a claim you won't find your premiums suddenly bumped up the next time. Of course, if too many people make claims the premiums will rise anyway. But aside from maybe having to pay an excess, there is no reason not to make a claim.

What happens if I change my mind about the policy?

There is a 14 day cooling off period if you change you change your mind. Within 14 days after the issue of the policy, provided the journey has not been started and a claim has not been made under the policy, the insured will be refunded the full amount of the premium paid. All the information is in the Product Disclosure Product. If you have any further questions you can ring the 1300 number.

Will my selected insurer pay out?

If you are concerned about the reliability of your travel insurance company, contact the insurance regulators – Australian Prudential Regulation Authority (APRA) and/or Australian Securities and Investments Commission (ASIC).

When can I have my claims paid?

Usually when you return to Australia, and make a claim and only then after the insurer is satisfied that all the paperwork is complete. If you plan to be away for a long period, or the loss you've experienced is causing you serious financial troubles, contact the insurer or the emergency assistance helpline to discuss the options.

General Insurance, Code of Practice

Members of the Insurance Council of Australia must adhere to the General Insurance Code of Practice, which sets out requirements such as proper training of staff, plain language wording and internal dispute handling procedures.

Insurance Ombudsman Service (IOS) is responsible for the administration of the Code. IOS can provide independent advice to consumers and is also responsible for the administration of the resolution of consumer disputes. The IOS can be contacted on free call 1300 78 08 08

I don’t understand. Who can I ask for clarification?

Don't be afraid to ask questions if you don't understand how a policy works or if you want to clarify how the insurer will apply special policy terms such as "unattended" and "reasonable".
If the person selling the policy can't give you an adequate explanation, then contact the insurer direct for more information. It's often a good idea to make a note of any special advice or explanations that the agent or insurer has given you in case there is a disagreement about what was said.

How do I make a complaint?

As with all insurance, first talk to your insurance company. If the matter is not resolved, you can go to the Insurance Ombudsman Service for help.

Call toll free 1300 78 08 08.

To obtain information and advice on an insurance complaint, go to the Financial Industry Complaints Services website: www.fics.asn.au

For copies of the general insurance code of practice and information on dispute advice go to the Insurance Council of Australia website: www.ica.com.au/codepractice.

Travel Tips

Lost documents
Think ahead. Leave a photocopy of your passport and tickets with someone at home, and carry another copy in your luggage. That way, if you lose your passport or tickets it's much easier to replace them.

Your state of health
If you have what the insurers call an "existing medical condition", it doesn't mean that you can't get travel insurance. Ask for a Traveller's Appraisal Form, which you must complete and submit, to the insurer. Sometimes an additional premium payment will be required.

If you have to rush home
Some insurers will pay for you to resume your holiday if you have to return to Australia because someone close - usually a relative - has become seriously ill. However, if you are aware of any conditions that may cause this to happen, you should tell your insurer when you take out the policy.

What's in your luggage?
Read the luggage section of your policy very carefully. You will find that individual item limits apply and the insurer will observe these limits.

Keep your valuables secure at all times
While you are travelling, keep your valuable items - laptop, cameras, and jewellery - with you. Don't expect your insurer to reimburse you for lost your luggage left unattended in a public place, or in a motor vehicle overnight.

Mobile phones, cameras, sound systems, and computers are highly prized. So don't leave them in a vehicle at any time. Remember that rental cars are normally identified through signs or registration plates, which makes them a hot target for thieves.

Don't trust strangers to look after your gear for you
In one recent case, a claimant tried to convince his insurer - unsuccessfully - that leaving his luggage in a New York taxi while he dashed into a shop was a perfectly reasonable thing to do.

Keep receipts for any claimable items that you buy
Keep receipts separate from the goods you buy while travelling.

Report losses to local police
If you have anything stolen, report it to the local police immediately and get a copy of their report. It's vital when you come to make a claim.

You can't claim for cash
Insurers don't normally compensate you for losing cash. Use your credit cards and travellers cheques whenever possible and limit the amounts of cash you carry.

Are you licensed?
Don't drive a motorcycle overseas unless you have a valid international licence. Wear a helmet, even if local laws don't require it. That's the best form of insurance there is.

This is general information only and does not consider your personal circumstances. You should refer to the Product Disclosure Statement before making any decisions about this product. This Insurance is issued by Allianz Australia Insurance Limited ABN 15 000 122 850, and is managed by ETI Australia Pty Ltd ABN 52 097 227 177 trading as Mondial Assistance.