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Travel Insurance

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It wasn't that many years ago that the Aussie dollar languished at 48 US cents and holidaymakers stayed put.

But with the Aussie running in the 70 to 80 US cents range, overseas destinations are again affordable. 

All the more reason, then, to pack that all-important piece of paper with your passport: travel insurance.

For the sake of a few hundred dollars you can protect yourself against the unexpected and save yourself lots of angst and money.

For instance, top cover (with no excess) for 23 days with one company is $209 for a single or $414 for a family of four for travel to the US; $179 and $354 to Europe; $162 and $321 to Asia; and $120 and $238 to the Pacific.

Travel insurance covers:

• emergency medical and dental care; 
• refunds of deposit and cancellation charges;
• additional travel and accommodation expenses; 
• loss of baggage and 
• accidental injury or death.

But the policies come with loads of exemptions and exclusions, which means travellers should take nothing for granted and check the fine print.

For many people, medical cover is their top priority.

There's a case of a young lady who fell ill in the United States and eventually had to stay in a Los Angeles hospital for 12 days. The bill? A mere $US150,000 ($218,000).

The simple lesson is: never leave Australia without travel insurance. 

When you pay for your holiday, or for your airline ticket, simply buy your insurance at the same time for the specific period you're travelling. 

Then you won't get caught.

Many people fail to realise that it's important to buy the insurance at the same time that you purchase your ticket.

This will protect you in the event that you need to cancel your trip due to accident or illness prior to departure and cover you for any deposits or cancellation charges.

So why do so many Australians choose to spend thousands on a holiday and then fail to take out insurance?

Most people either don't think about insurance, they think it will be too hard or they just run out of time before they leave for overseas.

Often people think it is just too expensive. 

But you really have to weigh the cost up against the cost of something going wrong. 

Then it really is a false economy. 

Even if you are travelling within Australia, you should take out insurance, as you never know what might go wrong.

If cost is an issue, then one way consumers can reduce the cost of travel insurance is to look at changing the excess payment options in order to reduce the premiums.

Most policies offer these variations. 

It means that at an agreed price, the insurance company will reduce your premium but in return, you will pay a higher excess if something goes wrong. 

So you may pay the first $300 of any claim, rather than, say, $200.

But there is a strong argument that says travellers should always pay the extra $10 premium or so required, so if you make a claim you won't need to pay any excess. 

Rather than focusing so heavily on cost, experts says you should focus on what you are getting for your money.

All travellers should read through the insurance policy very carefully before they buy it.

Each insurance policy is different, so it is important you read through the policy document carefully and understand exactly what is covered and what is not covered before you spend your money.

The insurance provider needs to be recognised around the world and, in particular, the underwriter needs to be well recognised as an insurance underwriter in the part of the world that you intend travelling in.

You should ask whoever is selling the insurance who the underwriter is and what their insurance credentials are. 

If they can't tell you or if you haven't heard of the company, then perhaps you should consider a different policy.

The biggest single cost in any travel insurance policy is medical cover. 

If you are travelling through the United States or Canada, then you should ensure any medical coverage you take out is unlimited.

If you are travelling to Europe, South America, the Middle East, Japan or Africa, you should consider at least $750,000 in medical cover; if you are travelling to Asia, a minimum of $400,000; and if you are travelling to the Pacific, at least $100,000.

Travellers should also be aware travel insurance no longer covers acts of terrorism, nor do most policies cover losses incurred from companies that go into administration or collapse.

If you are travelling to countries such as the United Kingdom, which have reciprocal medical agreements with Australia, it is still advisable to take out some form of medical insurance.

It's getting increasingly difficult to get into public hospitals for anything other than emergency procedures, particularly in the UK.

So often, people who fall ill overseas find themselves being treated in private hospitals. 

If you fail to take out medical insurance because you believe you can count on Australia having reciprocal rights with another country, you may find yourself with a very big medical bill from a private hospital if something happens to you.

Another important issue to keep in mind when selecting insurance cover is to make sure the company has a 24-hour, seven-day-a-week hotline that you can contact easily from anywhere in the world, says Jackson.

That might not sound very important now, but if your spouse or travelling companion suddenly falls ill or has a heart attack, then you will need to contact your insurer as soon as possible and you will need a 24-hour emergency phone number."

Most quality medical insurance will cover the full cost of any medical evacuation back to Australia. 

But you should double-check this with the insurer before you book the evacuation, as their idea of what is adequate may not be the same as your own.

For example, if you break your leg overseas you may think a first-class airline seat is essential to allow you to keep your leg up during the flight - but your insurance company may not agree. 

So make sure you check before you book the trip home." Also, if you plan to rent a car, check whether the policy has an adequate excess waiver so that if you have an accident and damage the car you are fully covered. 

Once you have this you can ignore the pressure from car hire firms to buy their insurance, which can cost more.

The other big issue in travel insurance is declaring any medical conditions. 

This was the subject of a recent landmark court case, which has prompted all insurance companies to tighten up their policies.

It is vital you declare any medical condition you may have when you are completing the application form.

It really is one of the trickiest aspects of taking out medical insurance and it is vitally important you get it right. 

If you have any doubts, you should discuss them with the insurance company providing the cover.

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