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FAQ’s
for Purchasing Travel Insurance
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.
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