Health insurance and government agreements

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This was published 8 years ago

Health insurance and government agreements

By Michael Gebicki
In Venice you have a greater chance of falling into a canal, but your travel insurance will cost the same as for Rome.

In Venice you have a greater chance of falling into a canal, but your travel insurance will cost the same as for Rome.

TRAVEL INSURERS DO NOT SEEM TO TAKE INTO ACCOUNT RECIPROCAL HEALTH AGREEMENTS BETWEEN AUSTRALIA AND POPULAR DESTINATIONS LIKE THE U.K. AND ITALY. I HAVE MADE A COUPLE OF TRIPS TO ITALY ONLY BUT THE PREMIUM WAS THE SAME AS IF I WAS TRAVELLING TO A COUNTRY WITHOUT A RECIPROCAL HEALTH AGREEMENT. WHY IS THIS SO?

N. COLLINS, MAJORS CREEK

Interesting question, but taken to its logical conclusion that would require travel insurers to customise their product and charge a different price for each individual trip. Every country has its own specific set of risks that might cause a traveller to make a claim against their insurer. For example my next trip is to Japan, where the chance of me requiring medical attention, being robbed or losing my baggage is low. However my travel insurance premium will be the same as if I was travelling to India, where the risk of all three is higher.

A travel insurer could certainly tailor a policy to fit a specific trip, but it gets complicated. In the case you've quoted, you might spend two weeks in Italy, and due to the reciprocal health care arrangement with Australia, you might be entitled to a lower premium than someone visiting Austria for two weeks, which does not have such an arrangement. On the other hand, you are more likely to be robbed in Italy, which raises your premium, and then again you might be visiting Venice during the full moon, when statistics suggest your chance of falling into a canal, and a subsequent insurance claim, is much higher, taking your premium up another notch. Crafting a unique policy to suit each traveller's needs would be a long process and that would be reflected in the premium price. For simplicity's sake, and to keep premiums at a reasonable level, insurers lump travellers into various baskets. Premiums are calculated according to which continent you're visiting and for how long. For better or for worse, that puts the traveller to Italy, with its reciprocal health agreement with Australia, in the same boat as the traveller to Austria.

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