Journey through the fine print

Wading through the language of a travel insurance policy is the worst part of holiday planning. Understanding the most common traps can make it easier.

I lost three hours of my life searching for a travel insurance policy for a forthcoming trip.

With adventure sports and some other complications thrown in, I ruled out policy after policy before finding something that, although not perfect, would fit the bill.

It's easy to understand why a survey by SureSave Travel Insurance found just 30 per cent of Australians thoroughly read the product disclosure statement to find out what they are covered for.

Nearly two-thirds of the 1000 people surveyed said they skimmed the document, with 9 per cent admitting they hadn't read it at all.

While reading fine print is no one's idea of fun, there is no point in shelling out for a policy that won't pay up.

Nor can we afford to throw our hands in the air and say "why bother", when overseas medical costs can quickly add up to hundreds of thousands of dollars.

The good news is that there are now so many travel insurance policies in the market that you should be able to find something to adequately cover almost any traveller or trip.

The downside of more choice is that it means more research and more reading, especially for harder-to-insure folk such as older travellers and adrenalin junkies.

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Consumer watchdog Choice conducted a review of 89 insurance policies in late 2012 and found significant differences between them, leading it to declare that "choosing the wrong policy can almost be as bad as none at all".

The organisation says only 30 per cent of disputes that reach the Financial Ombudsman Service "decisions stage" are resolved in favour of the applicant, because the ombudsman can only help where the issue is covered by the policy taken out by the traveller.

There is no inbuilt safety net for those who choose the wrong policy or fall through a gap by failing to declare a factor that could affect their insurance.

SureSave, which has rewritten its product disclosure statement in an attempt to make it easier to read, says one of the most common misconceptions about travel insurance is airline delays, with travel insurance generally covering weather-related delays but not those caused by airlines.

Pre-existing medical conditions are another problem area, along with varying levels of cancellation coverage, with some insurers capping payouts that are related to cancellation.

Choice chief executive Alan Kirkland says while the fine print of a travel insurance policy might add up to 15,000 words or more, there are four key areas that travellers should focus on.

"We would never say don't read the whole thing, but be aware of some of the most common traps and think about what you're going to be doing on your trip," Kirkland says.

The first area to read carefully is "general exclusions", which tend to be situations such as the financial collapse of an operator, and the second is "policy cover", to ensure you have appropriate cover for medical care, activities you are planning and valuables you are taking with you.

The third area to look at in detail is "pre-existing conditions", as policies vary enormously in the medical conditions they will automatically cover, those that need to be declared and those they will not cover.

Kirkland warns pregnant women and older travellers in particular to take the time to read this fine print.

The final section to check is the "word definition table" or glossary, as definitions vary from one policy to another.

For example, insurers have varying definitions of who qualifies as a "relative" if you need to return home as a result of a relative's death.

For pregnant travellers, Choice recommends Good2Go, Chartis, Defence Health and Columbus Direct, all of which cover pregnancy up to 26 weeks or more.

Older travellers should look at Allianz, Medibank and Cover-More, which cover a range of pre-existing medical conditions without assessment or extra premiums.

Those who like to spend their holidays jumping out of planes or diving the depths of the ocean should look into Medibank and Cover-More, which cover the "widest range of activities", according to Choice.

Finally, remember to take out travel insurance as soon as you book your holiday, as it does not cost any extra and it will cover you if you are unable to go on your trip because of illness or other unforeseen circumstances.

Going on a cruise?

Cover-More warns Australians going on domestic cruises not to rely on Medicare and private health funds to cover them in the case of accident or illness. Strategy and marketing manager Zac Brookes says medical bills incurred on a cruise ship typically fall outside Medicare and health funds and need to be covered by an international travel insurance policy (domestic policies do not include medical cover). Brookes says many travellers have faced significant costs for medical expenses when they have cruised without international insurance.

Destination watch

Peru is in hot demand with Australian travellers, and our stomachs are helping to guide us.

Peru recorded a 17 per cent jump in Australian visitors for 2012, a popularity that is being attributed partly to a gastronomic boom in the South American country.

More than 35,000 Aussies travelled to Peru in 2012, and it is believed many were on the "foodie trail", with Peruvian cuisine having become fashionable in food circles.

People traditionally travel to Peru for its ancient history and colourful culture, with the ruins of Machu Picchu and the Inca Trail hike remaining big attractions.

Other visitor highlights include staying in the Amazon jungle and flying over the Nazca Lines, which are large and mysterious images drawn in the Nazca Desert. UNESCO says the lines were drawn between 500BC and AD500 and remain one of archaeology's "greatest enigmas".

Peruvian tourist board PromPeru says it is working hard to draw travellers beyond Machu Picchu.

"The country has many archaeological sites which are a legacy of even more ancient times than the Incas," says the PromPeru co-ordinator for the Asia Pacific region, Rosana Guinea.

She says Peru also has a range of new hotels, including luxury and boutique properties.

jane@janeefraser.com.au

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