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There are good reasons to buy travel insurance, even though it is easy to skip when you are watching your budget, whether the trip is abroad or at home. It feels like money spent on something that may never happen. Yet one cancelled flight, hospital visit or lost bag can cost far more than the policy.
Below are the top 10 reasons to buy travel insurance, followed by a simple way to choose a policy that fits your trip.
Top 10 Reasons to Buy Travel Insurance
- Trip cancellation: Illness in the family, a sudden work emergency or another covered event can force you to cancel. A policy can refund non-refundable bookings such as flights, hotels and tours.
- Changed travel dates: If you must move your dates at short notice, airlines and hotels often charge change fees. Some policies cover these costs when the reason is listed in the policy.
- Medical emergencies: Treatment away from home can be expensive, especially overseas, where you may not have access to public healthcare. Medical cover is the single most important part of most policies.
- Medical evacuation: If you are injured somewhere remote, such as on a ski slope or a trek, getting you to a suitable hospital can cost far more than the treatment itself.
- Travel delays: Storms, volcanic ash and other disruptions can strand you for days. Delay cover can pay for extra meals, hotel nights and alternative transport.
- Lost, stolen or damaged baggage: Bags go missing on connections and get damaged in transit. Baggage cover helps you replace essentials and belongings, up to the policy limit.
- Trip interruption: If a close relative falls seriously ill while you are away, you may need to fly home early. Interruption cover can refund the unused part of your trip.
- Lost passport or documents: Replacing a passport abroad takes time and money. Many policies cover the cost of emergency documents and the extra travel to get them.
- Travel provider collapse: Some policies cover losses if an airline or tour operator goes out of business before or during your trip. Check this carefully, as it is often excluded.
- Flight cancellation: Weather, technical faults and strikes can cancel flights at the last minute. Cover can pay for rebooking or accommodation while you wait.
A policy usually costs a small share of the total trip, and it protects you against the costs that are hardest to absorb.
How to Choose a Travel Insurance Policy
Policies vary widely in what they cover, what they exclude and what they cost. Work through these three steps before you buy.
1. Check what you already have
Find out whether your health cover, home insurance or credit card includes any travel benefits, and whether they apply overseas. Many domestic health plans do not cover treatment abroad.
2. List what you must have
Decide which cover you cannot do without. For most travellers that means medical cover, evacuation, cancellation and baggage. Add cover for activities you plan to do, such as skiing or scuba diving, and declare any pre-existing medical conditions.
3. Compare limits and exclusions
Compare the maximum payout for each benefit, the excess you would pay on a claim, and the exclusions. Check that the insurer is licensed in your country. The Australian Government’s Smartraveller guide to travel insurance is a useful checklist wherever you live.
Read the policy wording before you pay, keep a digital copy with you, and save the insurer’s emergency number in your phone. If you are still booking, our guide to finding cheap flights explains how fares move.
This article is general information, not financial advice. Policies differ, so read the policy wording or product disclosure statement and consider whether a policy suits your needs before you buy.
