by Results of a “What About” survey from Australian government website Smarttraveller this month show that one in six Australians traveled without any insurance on their last overseas trip. Those who did have insurance may have been under-covered, as over 80% of travelers did not properly read their policy product disclosure statement (PDS), a necessary step in understanding what is and is not covered.
In a statement, Andrew Hall, CEO of the Insurance Council of Australia, said these results mean “Australians are putting themselves at risk,” and that “personal responsibility plays a big part in your travel plans and the details of your policy are important to read. , so you know you’re covered”.
Related: ‘Even the smallest town has electricity’: how to plan an Australian outback road trip on an EV
But insurers don’t always make it easy for consumers to understand their cover. There are often differences between the top line payment numbers in travel insurance sales documents and the exceptions, exclusions, caps and other icebergs buried in the fine print of the PDS.
The Australian Securities and Investments Commission (Asic) first identified this issue last year, when Allianz and AWP pleaded guilty to making false statements about travel insurance between 2016 and 2018.
So whether you’re buying a policy for your next trip, or if you already have one, it’s essential to read the PDS before you go – no matter how many legally numbered pages it contains.
Why the PDS is important
It may not be helpful to question and ask a potential insurer. In reporting this story, Guardian Australia contacted a number of travel insurance company call centers to ask for clarification on payment guidelines. Many times the call center staff gave inaccurate answers which exaggerated the likely payment while at the same time saying that any general advice and only the PDS would be legally binding.
Consumer advocacy group Choice recommends specifically checking:
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PDS benefit table, which summarizes your cover.
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There is the policy cover section, which is divided into “what we will pay for” and “what we will not pay for”.
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General exclusions.
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Preexisting conditions.
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The word definition table.
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The paperwork you need for a claim
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the part about Covid coverage, and;
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The 24 hour emergency assistance information.
Remember the connecting flight times
Two in five Australians have had their flight delayed or canceled in the past 12 months, so most travelers are likely to have experienced delays and missed connections.
If the flight cancellation or delay was caused by an airline, you will need to look to that airline for any compensation. Generally, airlines will offer to book you on a later flight or give you a credit. Travel insurance customers can only attempt to lodge claims if the cancellation or delay was caused by circumstances beyond the airline’s control, such as bad weather or strikes.
But many airlines are not giving reasons for cancellations or delays. In these cases, you must provide the airline with details of your application and provide your insurer with a reasonable explanation as to why this information was not provided – which may be impossible or at least difficult.
Insurers also differ in how they cover non-airline-caused airline delays. Cover-More, for example, does not cover missed connecting flights if the scheduled transit time is less than 90 minutes, even if the airline itself has scheduled a tighter connection. World2Cover will only consider claims for flight delays of more than six hours.
Related: I was not notified when my flight time changed from 9am to 6am. Can I get compensation?
If a flight delay or cancellation prevents you from boarding a cruise, prepaid flight or multi-night trip, most travel insurance will cover additional transportation and accommodation costs to enable you to make or arrive at your pre-booked connection up to your itinerary – minus whatever the travel provider covers.
Beware of stolen baggage exclusion (and minimize your risk)
Make sure you read the meaning of “unattended” in the word definitions in the PDS, specifically as it relates to luggage stolen from cars, stowed in a train baggage area or checked in at an airport. Different insurers also have different item limits for laptops, cameras, smartphones and tablets.
Luggage stolen from cars is worth examining in detail if you are going on a driving holiday. With most policies, luggage must be stolen from a locked boot or hidden storage compartment during daylight hours, there must be forced entry into the car and you must make a police report if you have any chance of payment to get. So if a car is stolen from an unlocked car, the luggage was packed, or it was left in a car overnight, you won’t be covered.
Luggage stolen from cars may also have additional caps. Cover-More, for example, reduces its payout for stolen luggage to $2,000 per vehicle, minus the selected excess. With all other payments for stolen luggage, their the person payout ranges from $5,000 to $25,000, depending on the level of coverage chosen.
Travel insurance has a much lower loss ratio (payment of claims as a percentage of total premiums) than other types of insurance such as car or household contents. A review by the European Insurance and Occupational Pensions Authority found that total payouts averaged just €14 for every €100 spent on travel insurance. The loss ratio for auto or home insurance is generally 60-75%.
While this can be partly explained by higher administration costs, limited underwriting, and a thick band of commission-earning salespeople (think Flight Centre, Qantas, and state car societies), caps and exclusions are likely for worst-case scenarios. . is also a factor.
Be careful with preexisting conditions
In general, it’s best to confirm your pre-existing conditions when buying travel insurance, but be aware that this could increase your premiums or even hurt your ability to get insurance for those conditions altogether. . You may still be able to get cover for lost luggage, delayed or canceled flights and other trips.
This is a complicated, confusing area, not only for older travelers, who may have more serious medical conditions, but also for pregnant women. Insurance companies vary the number of weeks allowed in their cover for pregnant travellers. Generally, assume they are in the business of limiting payouts.
Basically any health issue you know about, or have ever been treated for, can count as a pre-existing condition. These will only be covered by travel insurance if you declare those conditions for evaluation or if they appear on the list of dozens of pre-existing conditions (including high cholesterol, bunions, asthma, and type 1 and type 2 diabetes) which is covered by most insurance companies. general policies. However, be aware of all conditions and always read the PDS.
If, for example, you don’t declare that you have a heart stent and have a heart attack while traveling, you won’t be covered.
Some travel insurance policies will not cover people over the age of 80. Others charge higher premiums, higher excesses and impose restrictive conditions on “older” travelers – which could be defined as under 50 in some cases.
Some travel insurance companies adjust their prices and coverage based on the traveler’s destination. For example, there is some reluctance to cover people with some pre-existing conditions if they are traveling to the United States, due to the excessive medical costs there, as well as many countries with few facilities they heal.
Related: An Australian airline has canceled our flight and we want a refund. Is there anything we can do?
Policies on mental illness also differ. By Choice, many travel insurers will not provide cover for hospitalisation, medication or missed travel due to a mental health condition. Others will offer cover if you declare mental illness as a pre-existing condition and pay a higher premium. Insurers are unlikely to pay a claim related to mental health if it is undisclosed and pre-existing.
If you have to delay or change plans due to the immediate illness of a family member, expect a similar rigmarole if their medical problems were caused by a pre-existing condition. Be sure and check the definition of “immediate family member” as well.
Go to a doctor if you get Covid (and prepare to pay more)
Cover-More was the first travel insurance company in Australia to offer Covid cover. Today, the company adds an additional $500 deductible for reimbursements made when a traveler contracts Covid-19.
World2Cover only offer Covid cover with their most expensive policy. It covers unlimited overseas medical and hospital expenses, plus $3,500 per adult for additional Covid-related expenses.
No insurance company will provide cover if the country or countries you are traveling to is in lockdown due to Covid, nor will they pay for travel delays due to general pandemics of any kind.
To make a claim you will need to show proof of a Covid diagnosis, from a qualified medical practitioner; a positive Rat test is not enough.
Once again, it comes down to reading the insurance company’s PDS, asking lots of questions and keeping a detailed record of the answers you get, in case you need to dispute a claim later. Like all insurance, if you buy it, hopefully you won’t have to use it.
Who are you going to call?
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Travel insurance offered through Cover-More is also distributed through Medibank, Commonwealth Bank, NRMA, Flight Center and Travel Associates and is underwritten by Zurich Insurance Group. They have call centers based in Australia and offshore.
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Travel insurance offered through World2Cover is also offered through state motoring associations, other than NRMA, and is underwritten by Tokio Marine & Nichido Fire Insurance Co. Their call centers are based in Australia.
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Travel insurance offered through Qantas is underwritten by AIG Australia. Qantas travel insurance call centers are based in Australia. AIG has offshore call centers.
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Travel insurance available through Westpac, ANZ and NAB credit cards are underwritten by Allianz. The Allianz call center is offshore.
