Travel Insurance Buying Guide

Some travel destinations pose higher risks to travellers, or generally are more expensive for travellers seeking medical treatment. For example, staying overnight in hospital in the United States can be significantly more expensive than staying in a hospital in Thailand.

For this reason, travel insurance policies for individuals travelling to the United States may generally be more expensive than travellers going for the same period of time to Southeast Asia.

Older travellers are generally found to be more likely to make a claim from an incident while travelling. The cost of these claims can also be more expensive due to their severity.

If you are travelling for a longer period of time, you increase your risk of experiencing an unexpected emergency. The policy premiums for travellers going on longer trips will generally be higher than policy premiums for travellers going to the same destinations for a shorter period of time.

If you have an existing medical condition which is typically defined in the PDS, a travel insurer may automatically provide cover for the condition, or not provide cover for the condition, or provide cover for the condition if you pay an additional premium.

Travellers usually need to complete a medical screening over the phone or online to determine if their existing medical condition can be covered under applicable policy benefits.

Travel insurance companies typically offer a range of travel insurance policies with different benefits and/or different benefit limits allowing customers to choose from a range of policies that suit your unique travel needs.

Comprehensive policies tend to include the most benefits and have the highest benefit levels, compared to basic policy options which typically provide medical only cover and may have some lower policy benefits. Policies that have lower levels of cover and lower benefit limits and sub-limits can result in a cheaper policy, however it is important to note that there would be limited situations in which you would have cover.

Different activities involve different levels of risk. Some travel insurance policies will automatically cover some activities such as bungee jumping, trekking to a specified altitude, and snorkelling.

However, there are activities which may not be automatically covered due to their higher risk, such as going on a cruise, skiing or snowboarding, riding a motorcycle, moped or scooter, quad biking or jet skiing. If you are planning on doing higher risk activities, you may need to pay an additional premium for adding optional extras to your travel insurance policy to ensure you have cover for these types of activities.

Travellers may be able to pay an additional premium to specify some of their items as specified high-value items on their Certificate of Insurance. These specified high-value items would be covered for more than what they’re covered for under the standard luggage and personal effects terms and conditions of your policy.

Travel insurance excess is the amount that you are required to pay or bear for each claimable event under your policy. The excess on claims depends on the excess you chose at the time that you purchased your policy and will be listed on your Certificate of insurance. A higher excess can result in a lower policy premium.

The PDS typically sets out the eligibility requirements travellers must meet in order to be eligible to purchase a travel insurance policy. This may include criteria about where you reside, where your trip starts and ends and age limits among other criteria.

Insurers will often define what is meant by key terms for example, ‘dependant/s’, 'luggage and personal effects’, ‘snow sports’, etc.

The PDS includes terms and conditions of cover to explain the situations and circumstances in which cover under the various benefits would apply. Insurers explain the terms and conditions in which they will and won’t pay out a claim.

The policy benefits explain the circumstances, situations and events in which you may have cover under your policy subject to the terms and conditions, limits and sub-limits and exclusions that may apply to your policy. Benefits include limits and sub-limits which explain the dollar amount for which you may be covered up to if you need to make a claim.

Travel insurance benefit limits

Benefit limits specify the maximum dollar amount that you can claim for or be covered for. The dollar amount is typically in Australian dollars, especially if the policy is bought from an Australian travel insurance company like Fast Cover. Limits can depend on a number of factors including but not limited to:

• Age 
• The type of policy that you take out 
• The type of travel you are planning on doing 
• The type of activities you will be doing 

Travel insurance benefit sub-limits

Benefit sub-limits are smaller limits within the specified benefit limits. A benefit sub-limit is the maximum dollar amount that you can claim or be covered for, for a specific item, or event under your policy. For example, a luggage and personal effects benefit may have a benefit limit of $15,000 but there may be a sub-limit of up to $3,000 for a mobile phone.

General exclusions outline instances where to the extent permissible by law, your travel insurance policy will not provide you with cover. General exclusions typically apply to all policy benefits and can include situations, circumstances, events, acts or omissions carried out by you. This means that if your claim arises from a situation outlined as a general exclusion, your travel insurer may not be able to provide you with cover.

Although travel insurers are all different, common exclusions in travel insurance may include:

• You hurting yourself by acting irresponsibly, such as running with the bulls in Spain or challenging a professional Thai fighter in Thailand.   
• Injuries you sustain while under the influence of alcohol or illegal drugs or prohibited substances.  
• Claims that arise at a travel destination which is marked as ‘do not travel’ or ‘reconsider your need to travel’ on a government website such as Smartraveller.gov.au.  
• Injuries sustained while doing an activity that isn’t covered by your policy, for example, unlicensed motorcycle riding or competitive skiing and snowboarding. 
• Existing medical conditions you failed to disclose when purchasing the policy, or which are not covered by the travel insurer.   
• Stolen belongings that were left unattended in public.  
• Cancelling or changing your travel plans without a valid reason or because you simply don’t want to travel anymore.

It’s important to know what’s required when making a claim and which documents you’ll need to provide to your travel insurer. Depending on the type of claim, this could include things like a police report, a letter from a medical practitioner, or a statement from your airline or carrier.

The PDS will provide information on how to make a claim, this could include the following among other things:

• What to do when making a claim 
• How to notify your insurer and when 
• What documents you might need to provide your insurer to assess your claim 
• How your policy excess applies to claims made 
• How claims are processed 
• How depreciation may apply to your claim 
• What happens if you make a claim against another party 
• What happens if you have other insurance/s that can cover your claim 
• What happens if you make a fraudulent claim

Your insurer’s PDS will explain how to make a complaint and the steps involved in their dispute resolution process. The PDS will also outline how you can refer your complaint to an external dispute resolution body, the Australian Financial Complaints Authority (AFCA), within the required timeframe if your complaint isn’t resolved to your satisfaction.

Contact information is helpful if you need to get in contact with your insurance provider to make changes to your policy, update your details, make a claim or get in touch with the emergency assistance team.

Generally, the earlier you buy your travel insurance policy the better, for two main reasons: 

1. To get the most out of your cancellation cover: depending on your holiday plans, you could be left hundreds or thousands of dollars out of pocket if you unexpectedly have to cancel your trip and cannot get a refund. 
2. To avoid unexpected expenses:  purchasing travel insurance earlier provides cover for unexpected emergencies which means you can avoid unexpected out-of-pocket expenses 

At Fast Cover, you can buy travel insurance up to 12 months prior to your departure date, including before you’ve purchased flights or booked your accommodation. Fast Cover’s Standard Saver, Comprehensive, Domestic Plus and Snow Sports Plus policies may provide cover for trip cancellation expenses and this cover commences from the date of policy issue. Fast Cover’s Frequent Traveller saver policy may provide cover for trip cancellation expenses which commence from the policy start date selected by the customer.

If you buy a policy that includes cover for trip cancellation expenses, keep in mind you won’t have cover for deposits you haven’t made yet (for example, flights you haven’t booked). As soon as you do make these deposits, the travel insurance policy you’ve taken out will provide cover for them under the terms and conditions of your policy. Please refer to Fast Cover’s PDS for the terms and conditions which apply to the cancellation of cover. Each insurer may have different terms and conditions for cancellation cover so it is important to read the PDS to understand how cancellation cover may apply to your policy. 

Age is one factor that contributes to the cost of travel insurance. The price of travel insurance is calculated on the age you are when you buy the policy, not the age you are when you travel. Compare prices with your age today and your age after your birthday and you might find it’s cheaper to buy a policy before your next birthday!

Most travel insurance companies can provide you with a policy up until you board your flight, cruise ship or begin your road trip. So, if you are at the airport and remember you need insurance, you can always jump on your mobile and buy last-minute travel insurance.  Also remember the later you leave purchasing your policy the longer you risk not having cancellation cover.

Your travel insurer will issue you with a Certificate of Insurance that outlines your policy details and lists what you are covered for. Your policy is a legally binding document that tells you exactly what you’re covered for, who is covered in the policy and who you should call if you have an emergency overseas. 

Travel insurance companies issue alerts which may affect the cover your policy may provide. You also should be aware of Smartraveller Travel Advisories which are a rating system with four levels of caution, to represent the potential dangers of travelling to a country. These travel advisories can affect whether your policy will cover you if you travel to that country or region.

Once you have purchased your policy, you may be able to make changes due to any mistakes made when purchasing your policy or because your holiday plans have changed.

• Amending your policy: Need to update your contact details? Upgrade your policy? Put in the wrong departure or return date? Log in to your policy  
• Extending your policy: You can extend your policy while you’re travelling, up until your return date, as specified on your policy certificate. This can be done either online, or you can call your travel insurance provider to extend the policy for you.  An additional fee may apply. 
• Cancelling your policy: We know that things can change and sometimes you need to cancel your policy. If your travel date hasn’t passed within your cooling off period, and your cooling off period hasn’t already passed, we’ll be able to cancel and refund your policy premium as long as you have not made a claim. 
• Cooling-off periods: Some travel insurers provide a cooling off period that gives you time to double-check that the policy you have purchased is right for you. Fast Cover offers a 25-day cooling-off period. #

What you should do when something happens while you are travelling, depends on whether it’s an emergency situation or not. If in doubt, contact the 24/7 Emergency Assistance Team if your policy provides for it and they will be able to advise you on the best course of action to take for your specific situation.

If you are unsatisfied with the outcome of your claim, we have an Internal Dispute Resolution process which you have access to for reconsideration of your claim.

The team is typically made up of underwriter representatives who review your claim, all supporting documentation and the ruling made by the claims team. If they find in your favour, the claim denial will be overturned, and your claim will be paid. If they uphold the decision of the claims team, the claim denial will stand.

The Australian Financial Complaints Authority is a free and independent ombudsman service that resolves complaints by consumers and small businesses about financial firms. They are a free, fair and independent dispute resolution scheme.

Their role is to assist consumers and small businesses to reach agreements with financial firms about how to resolve their complaints. They do not act for either party to advocate their position. If a complaint is not resolved between the parties, they will decide an appropriate outcome.