What Travel Insurance Actually Covers

Smartraveller, the Australian Government's own travel advice service, states that if you cannot afford travel insurance you cannot afford to travel. It also states the reason plainly: the Government will not pay your overseas medical expenses or your evacuation costs, and consular services are not a backup plan.

Overseas medical bills reach hundreds of thousands of dollars, and in some countries an unpaid hospital bill leads to detention. That is the risk a policy is bought to cover. Everything else it covers is secondary.

Pre-existing medical conditions come first. Insurers exclude claims arising from a condition you had before buying the policy unless you declared it and the insurer accepted it, usually after an assessment and an extra premium. An undeclared condition can void the medical section of the policy entirely, including a claim unrelated to it. Smartraveller and CHOICE both flag this as the most common reason a claim fails.

Alcohol comes second. Most policies exclude claims where alcohol or drugs contributed to the incident, and insurers apply that clause to scooter accidents and falls with some enthusiasm. A hospital blood test settles the argument.

Two more catch travellers out. Riding a motorbike or scooter without a licence valid in that country voids the claim, which affects a large number of Australians in Bali and Thailand. And travelling to a destination against a Do Not Travel advisory on Smartraveller usually removes cover for that country.

Often yes, and the cover is real. It activates only when you meet the conditions, which typically means paying a set portion of your prepaid trip costs on that card before you leave.

Card policies also carry age limits, trip length caps and the same pre-existing condition exclusion, and they rarely allow you to apply for an assessment. Read the policy your card issues rather than assuming it matches a standalone product.

The excess is what you pay before the insurer pays anything, applied per claim. Basic policies carry a much higher excess than comprehensive ones, which is part of why they quote lower.

Some insurers let you buy the excess down to zero for an extra premium. That makes sense when you expect small claims and less sense on medical cover, where the excess is trivial against the size of the bill.

When you book, not when you fly. Cancellation cover only works against events that happen after the policy starts, so a policy bought the week of departure covers none of the months when something might have derailed the trip.

Buying early also fixes the pre-existing condition assessment while you have time to deal with it.

Two policies at the same premium can differ by tens of thousands of dollars on medical limits and by an entire section on what they exclude. The premium is the least informative number on the quote.

Declare every condition, check the excess, and confirm your destination carries no Do Not Travel advisory before you pay.

The other pre-departure money job is your card. Our travel money card comparison covers foreign transaction fees, and our trip planning guides handle visas and timing.