Do You Need Travel Insurance?
Note that we are simply sharing our limited personal experiences on this website and we are not travel, insurance or financial advisors, and are not affiliated with with any travel, insurance of financial providers.
Travel insurance can be expensive, but not having it can cost you a lot more, especially if you require medical services overseas. However, it can look like a bargain when you realise that it is generally available at a lower cost than Australian comprehensive health insurance.
Replace Health Insurance with Travel Insurance
If you have Australian comprehensive health insurance most insurers allow you to put it on hold while you are overseas – HCF for example advised that their cover could be “suspended” for a minimum of 30 days and up to 2 years. Here is a link to their website information on pausing health insurance while overseas:….
The savings from this – nearly AU$3,000 for my current 12 month trip – more than cover a year of Qantas travel insurance, with enough left over for a cheap airfare from Australia to Europe. But before you rush to pause your health insurance, check the effect on your income tax – depending on your total income at the time of travel you may have to pay a Medicare supplement.
Also check the conditions related to pausing your health insurance, such as whether you will need to serve waiting periods when you reactivate it. Remember that Travel insurance medical cover is not a full substitute for health insurance, it is more for emergencies and to get you back home for treatment where possible.
Reciprocal Health Care Agreements
Of course Australia has Medicare, so getting back home will ensure that you can receive good medical attention even without health insurance, but what about other countries? Australia has reciprocal health care agreements in place with a number of countries (but not France!), which means that under certain circumstances Australians can be treated in the public health system of those countries.
The Australian Government Smart Traveller website provides current information on these agreements.
Multi-trip vs Long Stay
Most 12 month travel insurance policies are multi-trip, which means they cover a series of trips – usually of not more than 90 days – over the period of insurance. Unfortunately that does not work for a year of travelling, which requires a long single-trip policy.
For reasons unknown this type of cover seems to cost up to twice as much as a multi-trip policy for the same duration, and is not offered by as many travel insurers. Once again, shop around, and read the fine print.
Travel Insurance for the USA
If you are travelling to the USA travel insurance costs can double, probably because of high medical cost there. If a US visit is only part of a long term trip, see if you can get separate cover for just the USA portion to avoid increasing the cost of your full-length policy.
Extending cover when overseas
If you decide to extend your travels while overseas it can be complicated to extend your travel insurance, particularly if you will be exceeding 12 months away. You might need a new policy that covers the additional travel, and while that is simple if it is a trip starting and ending in Australia, it is more difficult to arrange when you are already overseas.
Fortunately a number of Australian travel insurance companies allow you to take out new insurance cover when you are already overseas – here is a list of travel insurance providers to try. Additional limits and conditions apply, but I was able to take out travel insurance to cover extending a trip while already travelling.
Some points to consider with travel insurance are:
Shop around, prices vary widely. Comparison websites such as Compare the Market and Canstar can be useful, but may not include all insurers.
Some credit cards offer insurance when you pay for travel though them, but look carefully at the level of cover and exclusions to make sure it will be adequate for your needs.
Look at all the items and options – some you will not need, while others will be important.
Rental Car Cover
For example, if you plan to rent a car, most travel insurance includes cover for the rental car company insurance excess, which can be $4,000 or more. So your travel insurance can save you from accepting the expensive “optional excess waiver” insurance that the car rental company will usually try to sell to you. But check your cover and its conditions carefully – is rental car excess included, is the cover amount high enough, what is and is not covered etc.
Note that rental car policies typically do not cover glass, wheels and tyres, underbody and roof damage, and your travel insurance benefit often does not either. Modern car wheels, tyres, and particularly windscreens, can cost thousands to replace. For this reason I often take out separate rental car cover, such as offered by RentalCover.com, to ensure cover for all possible claims on substantial or risky road trips in Australia or overseas.
When booking a rental car recently through Orbit Car Hire (a car rental search and booking website) they offered a “Premium Cover” add-on that looked reasonable, so I selected that rather than rely on the main travel insurance. It cost a fraction of the car company’s extra cover and was more comprehensive, plus it seemed to make sense to have the same company that booked the car providing the excess insurance. But like all insurance you never really know until you have to make a claim, which of course you hope you won’t have to do!