Travel Insurance: What It Covers, What It Doesn't and How to Choose
Understand common types of travel insurance cover, exclusions, policy limits, excesses and the important details to check before choosing protection for your next trip.
Travel insurance can provide financial protection when certain unexpected events affect your holiday, business trip or international journey.
Problems such as illness, cancelled travel arrangements, lost belongings and significant delays can create unexpected costs.
However, travel insurance policies vary considerably. Buying insurance does not mean that every possible problem is automatically covered.
Understanding the policy limits, exclusions, excess and conditions can help you compare cover more effectively before purchasing.
Travel Insurance at a Glance
What Is Travel Insurance?
Travel insurance is designed to protect travellers against certain financial losses and unexpected problems associated with a trip.
Depending on the policy, cover may include:
- Emergency medical expenses
- Trip cancellation or interruption
- Lost, stolen or damaged baggage
- Travel delays
- Missed departures
- Emergency assistance
- Repatriation in certain circumstances
Why Consider Travel Insurance?
Even carefully planned trips can be affected by circumstances outside your control.
You may become ill shortly before departure, experience disruption during your journey or require medical treatment while travelling.
Without appropriate insurance, unexpected costs such as medical care, alternative travel arrangements or replacement belongings may have to be paid from your own money.
Travel insurance cannot prevent a problem from happening, but suitable cover may reduce the financial impact of certain eligible events.
What Does Travel Insurance Usually Cover?
Cover varies by insurer and policy. The following are common areas you may see included.
1. Emergency Medical Expenses
Medical cover can be particularly important when travelling internationally.
Depending on the policy, it may help with eligible expenses resulting from unexpected illness or injury during a trip.
Some policies may also include emergency transportation or repatriation.
Check the medical limit, excess, exclusions and any requirements relating to existing medical conditions.
2. Trip Cancellation
Some policies provide cancellation cover when you cannot travel because of a reason specifically covered by the policy.
Qualifying circumstances vary between insurers and may include certain serious illnesses, injuries, bereavements or other specified events.
Cancellation cover is not necessarily a refund for any reason you decide not to travel.
3. Trip Interruption
Some travel insurance may provide protection if you need to cut a trip short because of a covered event.
Depending on the policy, eligible costs could include certain additional travel expenses, accommodation costs or unused prepaid arrangements.
4. Lost, Stolen or Delayed Baggage
Some policies provide protection for eligible belongings that are lost, stolen or damaged during a trip.
There may be an overall baggage limit and separate limits for individual items.
Expensive cameras, laptops, jewellery or specialist equipment may have additional restrictions.
5. Travel Delays
Certain policies provide benefits when a covered delay continues beyond a specified waiting period.
Depending on the policy, this may involve reasonable additional expenses or a specified benefit.
Compare the waiting periods and limits rather than relying only on a headline description such as "delay cover".
What Doesn't Travel Insurance Usually Cover?
Understanding exclusions is one of the most important parts of comparing insurance.
Depending on the policy, cover may be excluded or restricted for circumstances such as:
- Travelling against medical advice
- Certain undeclared pre-existing medical conditions
- Some high-risk or adventure activities
- Incidents involving alcohol or drugs where exclusions apply
- Unattended belongings
- Certain destinations or travel circumstances
- Known circumstances that existed before purchasing the policy
- Failure to follow reasonable safety requirements
- Costs above the policy's stated limits
How Much Does Travel Insurance Cost?
There is no single price for travel insurance.
The premium may depend on factors including:
A lower-priced policy is not necessarily better value if the cover limits are too low or important risks are excluded.
How to Compare Travel Insurance Policies
Check Medical Cover
Review the emergency medical-expense limit and any exclusions that may affect your trip.
Also check whether emergency transport or repatriation is included.
Review Cancellation Cover
Compare both the cancellation limit and the reasons that qualify under the policy.
Consider whether the limit is sufficient for your prepaid travel costs.
Examine the Excess
The excess is the amount you may have to contribute towards an eligible claim.
Compare this alongside the premium rather than considering price alone.
Check Baggage Limits
Look at both the overall baggage limit and any maximum amount payable for individual items.
Read the Exclusions
Pay attention to medical conditions, adventure activities, unattended possessions and other policy restrictions.
Read the Policy Documents
If anything is unclear, contact the insurer before purchasing rather than assuming you are covered.
When Should You Buy Travel Insurance?
It can be sensible to consider insurance soon after booking a trip, particularly once you have paid non-refundable expenses.
The timing of your purchase can be relevant to cancellation protection because insurers may apply conditions relating to when an event became known and when the policy was purchased.
Check the specific purchase requirements and terms of the policy you are considering.
Is Travel Insurance Worth It?
Whether travel insurance is appropriate depends on your trip, circumstances, finances and tolerance for risk.
A short domestic journey may involve different risks from an expensive international holiday.
The potential financial impact of an overseas medical emergency, cancellation or significant disruption may be much greater than the cost of a simple trip.
Common Travel Insurance Mistakes to Avoid
Choosing Only on Price
Compare limits, exclusions, excesses and conditions alongside the premium.
Not Declaring Relevant Information
Follow the insurer's questions and instructions carefully, particularly where medical information is concerned.
Ignoring Activity Restrictions
Activities such as skiing, scuba diving, hiking or motorcycling may have special terms or require additional cover.
Waiting Until the Last Minute
Leaving insurance until shortly before departure may mean overlooking important cancellation considerations.
Assuming Every Item Is Fully Covered
Baggage sections may have individual-item limits that are much lower than the overall baggage limit.
Not Reading the Conditions
The actual policy wording determines what is covered, not the marketing headline alone.
What Should You Do If You Need to Make a Claim?
Follow the insurer's claims process and contact its emergency assistance service when the policy requires you to do so.
Keep relevant documentation, which may include:
- Receipts
- Booking confirmations
- Medical reports
- Police reports where relevant
- Airline correspondence
- Proof of delays or cancellations
- Evidence of ownership for lost or stolen belongings
Travel Insurance FAQs
Is travel insurance mandatory?
Travel insurance is not universally mandatory, although particular destinations, visa arrangements, tour operators or travel arrangements may have their own insurance requirements.
Check the requirements that apply to your specific journey.
Does travel insurance cover flight cancellations?
Some policies may cover certain losses resulting from qualifying flight cancellations, but this depends on the cause and the policy wording.
A voluntary decision not to travel may not qualify.
Does travel insurance cover lost luggage?
Many policies provide some protection for eligible lost, stolen or damaged baggage, subject to limits, exclusions and conditions.
Does travel insurance cover pre-existing medical conditions?
It can in some circumstances, but this varies significantly between insurers and policies.
You may need to disclose relevant medical information and obtain specific cover.
Can I buy travel insurance after booking my holiday?
In many cases, yes. However, the timing of purchase may affect which cancellation-related circumstances are covered.
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Final Thoughts
Travel insurance can provide useful financial protection when unexpected events affect a trip, but buying a policy is only the first step.
The most important part is understanding what you are purchasing.
Compare medical protection, cancellation cover, baggage limits, excesses, exclusions, activity restrictions and the conditions that apply to your circumstances.
Most importantly, read the policy documents carefully. The policy wording determines whether a particular claim is covered.
