Travel insurance isn’t always a popular topic, as it makes us think of the things that can go wrong. While some travellers see insurance as a requirement for any trip, others see it as an extra expense that could be spent on more time overseas or an upgrade for their experience.
Why buy travel insurance?
Like with car insurance or home contents insurance, travel insurance is there to help you when something unexpected happens. Depending on the cover you take out, this may help you if you’re ill or injured, if a flight is cancelled or if your luggage goes missing.
If something like this does happen, the general procedure is that you make a claim and your expenses are covered: you might get a new flight paid for, your hospital bills covered or a bit of cash to buy some new clothes. There are times when this is an absolute lifesaver, but other times when it’s too little or too late to make a real difference.
Is travel insurance worth it?
There’s no definitive answer to whether travel insurance is worth it or not, simply because there are so many factors to consider and so many unknowns at the start of your trip.
The upfront cost of travel insurance can change depending on a number of factors, such as your age, the length of your trip and where you’re going. Travel insurance for a USA holiday is a lot more expensive than one in Australia, for example, simply because of the huge medical bills you may face in America. Of course, if you’re travelling to the States, their healthcare system may be enough of a scare to make you see the benefits of having a safety net.
When you pay for the travel insurance you have no idea if you’re going to need it. If your holiday goes smoothly, there’s absolutely no need to make a claim so it can feel like an unnecessary expense. However, should something unexpected happen, it softens the blow of whatever it is that’s gone wrong.
For many people, that peace of mind helps a lot when they’re trying to get away to relax.
Others prefer to look at things more practically. The cost of travel insurance and its excess fees are often more than they could ever hope to get back. If you’re travelling with a brand new phone it may be worth getting it covered, but if you’re taking a model that’s a few years old you may be better off just buying a new one should it get stolen.
As for medical treatment, if you’re going to the USA or you’re on a cruise (and need to be flown by helicopter to the nearest hospital) for example, you’re going to face huge bills and you’re definitely going to want insurance. A trip to see a doctor in Bali or Phuket because of a tummy bug is a lot more manageable.
What isn’t covered by travel insurance?
Some people make the mistake of thinking that because they’ve bought travel insurance then they’re covered for all eventualities, when in reality there are a lot of exceptions. These vary by provider (with most offering an upgraded package to cover the more risky activities) but often the same items crop up time and time again.
Snow sports — whether that’s skiing, snowboarding or something more extreme — are almost never covered by a standard policy. If you’re planning to spend time on the slopes, it’s worth getting the extra cover.
Unlicensed activities — although there’s a sense of ‘when in Southeast Asia’ and hiring scooters, if you don’t have the licence to do so at home, you can’t do it overseas. Likewise with scuba diving — if you go underwater before getting a licence, your insurance provider is unlikely to cover you should something go awry.
Some medical treatment — if you’re getting treatment for a pre-existing condition, you get hurt while drunk or you didn’t get a recommended vaccination before you travel, it’s unlikely your hospital fees will be covered.
Terrorism or war — it may sound far-fetched, but if there’s a major outbreak that effects your travel plans (such as a revolution) it’s unlikely your insurance will cover any disrupted plans or cancelled flights.
Sometimes lost or stolen items aren’t covered in the way that travellers think they might be. Unattended luggage, even if just for a few minutes, may not be covered and passports or other important documents aren’t always included in your policy, as well as the knock-on effect of having to miss a flight.
What about credit card insurance?
Nowadays many credit cards offer travel insurance to their holders. As a general rule, these cover the basics and aren’t as thorough as a dedicated travel insurance policy (however, this varies between companies).
There are many things to consider when you decide to use your credit card provider’s travel insurance. Generally speaking:
- This insurance will only cover purchases made on this card. Anything that you pay for in cash, on a debit card or that someone else pays for (even if it’s for you) will not be covered.
- Likewise, it’s only the cardholder who’s covered. If you book something for a friend or family member, it’s unlikely they’ll be covered.
Depending on your card and your circumstances, you may find that you can get a cheaper policy that covers you for exactly what you need, but it’s good to check the details to make sure you have as much cover as you expect.
Who should buy travel insurance?
Only you can make this decision. Some people live by the adage that if you can’t afford travel insurance then you can’t afford to travel, and that knowing they have an insurance policy gives them peace of mind while abroad.
Others see it as a waste of money because nothing bad ever happens to them. All it takes is one unlucky experience to change that outlook, but until they pick a holiday where the risks outweigh the comfort it may not seem worthwhile.
Whatever camp you fall into, the most important thing is to know what you’re covered for before you sign up for anything, as this can make a huge difference when it comes time to make a claim.