If you don't have travel insurance you should not be stepping out your front door with suitcase in hand, but travel insurance has its own ifs and buts that can strip your coverage and leave you without the compensation you might be expecting.
Chances are you aren't going to wade through your travel insurance policy's product disclosure statement that spells it all out so here's a short, plain-speaking guide to some of the potential traps, and what you really need.
1. Claims for loss submitted without an official police report. If your belongings are lost or stolen you need a stamped and certified report from a police station in the region where the incident took place.
2. Not lodging your claim in time. The usual limit is 30 days after your trip ends.
3. Lack of relevant documentation to substantiate ownership. You need a receipt to prove that you actually bought that Prada backpack if that's what you're claiming for.
4. The concept of 'unattended'. If you stow your bags out of sight on a European train and they disappear, if you leave them on a table by the pool or on the beach while you take a dip, they're unattended and any claim for loss might be denied on the grounds that you did not take reasonable care.
5. Lack of cover for all your travel destinations. If you transit through Asia or one of the United Arab Emirates en route to Europe but your cover applies only for Europe you can't expect compensation from your insurer if something untoward happens during your transit stop.
6. Depreciation. That Burberry trench coat you bought for $1500 eight years ago and which was lost is no longer worth what you paid for it. Rather than full replacement value insurers apply depreciation, and that means an item purchased several years before might be worth only a fraction of its original price tag. It might even be less than the excess that comes with your travel insurance policy. If you want to lower the excess, expect to pay a higher premium.
7. One of the most common claims is for loss of a smartphone. Not all policies provide cover for lost or stolen phones, laptops, cameras and computers. Some do but apply a higher excess to those high-value items. If they're part of your travel kit, know your coverage.
8. Most travel insurance policies exclude disruption to your travel plans resulting from a terrorist event. Military action is another exclusion, as is epidemic.
9. If an airline or a travel operator becomes insolvent after you've already paid for their services you've probably done your dough, with no compensation from your insurer.
10. If an 85-year-old parent falls sick and you need to return home in a hurry that's not an unexpected event and you won't be compensated for any additional expenses or loss of travel bookings.
11. You're supposed to take all steps to avoid purposefully putting yourself into a situation that could result in a claim. If you go to Istanbul, which currently has a "reconsider your need to travel" warning on the Australian Government's Smartraveller website and you make a claim against your policy, your insurer might not come to the party. Fall down stairs and fracture your humerus after one too many slivovitzs and your insurer might say "tough break but that's down to you."
See also: Ten classic travel scams
When you buy travel insurance
1. Declare any pre-existing medical conditions.
2. Make sure your policy is relevant to any adventure activities you're planning. If you injure yourself heliskiing in the Bugaboos or lose skin riding a scooter on Bali, a general insurance policy won't cover you.
3. Choose an insurer that has a 24-hour hotline, and preferably a freephone line with access from anywhere in the world.
4. If you plan to drive coverage for personal liability is a must. If you are involved in an accident and cause damage or injure someone, your personal liability should be at least $1 million to cover any claims made against you.
5. If you travel more than twice per year an annual policy might work out cheaper than a standalone policy for each trip, and a lot more convenient.
6. You need a policy with unlimited medical cover on international trips, including medical evacuation. Medical expenses make up close to half of all claims with gastroenteritis at the top of the list, followed by food poisoning and injuries resulting from a slip or fall. At the high end of the scale hospitalisation in the USA chews through thousands of dollars per day while medical evacuation can cost up to $100,000.
7. Purchase travel insurance as soon as you book your trip. If something unforseen happens before departure – a volcanic eruption that causes flights to be cancelled, a medical emergency – you should be covered for any interruption to your travel plans. If you're organising your trip through a travel agent they might offer travel insurance at the time you make your booking but this will not necessarily be the best deal. Shop around before you commit, you might find a better price online but remember you usually get what you pay for. The cheapest policy might not be your best bet.
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