What is travel insurance?
Travel insurance safeguards travellers against unforeseen events during their journeys. It covers medical emergencies, trip cancellations, lost belongings, and other unexpected incidents. Australians' adventurous spirit often leads them to engage in high-risk activities abroad, increasing the need for comprehensive insurance.
The Australian travel insurance market was valued at approximately $2 billion in 2024, reflecting a significant increase from the previous year. However, recent accidents and the rise of dark tourism highlight the need for strong coverage to recover from emergencies and high-risk destination problems.
Travel insurance industry trends and emerging risks
The travel insurance industry is changing quickly due to global events, new technology, and shifting traveller needs. Geopolitical issues, cyber threats, and health crises are also affecting coverage demands.
Brokers must update policies to meet client needs and reduce potential risks while focusing on other key concerns, such as:
- many travellers are underinsured: overseas travel reveals gaps in Australians' coverage for medical costs and trip cancellations
- common mistakes cost travellers money: common travel insurance errors explain why ignoring pre-existing conditions or choosing the wrong policy often lead to denied claims
- domestic travel shifts with rising costs: high living expenses are pushing Australians towards road trips, introducing new challenges for insurers
The recent volcanic eruption in Bali also caused major disruptions, leaving many Australians stranded and raising another concern about travel risks. Brokers should recommend tailored protection that covers delays, cancellations, and extra accommodation.
Travel insurance FAQs
What company has the best travel insurance?
Determining the ‘best’ company for this insurance depends on individual needs, including destination, trip duration, and personal health. In Australia, providers like Fast Cover offer comprehensive plans. Take into account the following factors when comparing policies:
- coverage: medical, cancellations, and belongings
- exclusions: pre-existing conditions or risky activities
- limits: maximum payouts
- service: claim handling reputation
- cost: value for coverage
By evaluating these factors, travellers can select a policy that best suits their specific requirements.
Is there a difference between domestic and international travelling insurance providers?
Yes, domestic travelling insurance typically covers trips within Australia and focuses on issues like cancellations and lost luggage. International travelling insurance offers broader coverage, including overseas medical expenses and repatriation.
What is the average cost of travel insurance in Australia?
The average price of travel insurance for Australians is about $235. Prices can be as low as $20 for short domestic trips or higher for international travel.
How are premiums for travel insurance calculated?
Insurers consider several factors when determining premiums:
- destination: higher medical costs in destination countries raise premiums
- duration: longer trips mean higher costs
- age: older travellers face increased premiums
- medical conditions: pre-existing issues raise costs or limit coverage
- coverage: comprehensive plans cost more but offer more benefits
Are there more affordable options for group or family travel?
Yes, insurance for group or family travel is often cheaper than buying individual policies. It combines coverage for everyone under one policy, saving money and simplifying management. Insurers also provide discounts for families or groups travelling together.
How far in advance can I take out travel insurance?
It can be purchased up to 12 months before your trip. Early purchase provides peace of mind by securing coverage well before your travel date.
Can this insurance be purchased after booking a trip?
Yes, travel insurance can still be bought after booking, but it’s best to purchase it as soon as you start planning your trip. This ensures protection against unexpected disruptions.
Does the timing of purchase affect coverage benefits?
Yes, buying travel insurance early offers benefits like trip cancellation coverage. Waiting too long can reduce these benefits and leave travellers unprotected from abrupt changes.
What is the best travel insurance for seniors?
Providers like Cover-More offer comprehensive plans personalised for seniors. The best coverage for seniors covers medical needs, trip cancellations, and emergencies.
Is this insurance more expensive the older you are?
Yes, premiums generally increase with age due to higher health risks associated with older travellers. Older adults are more likely to need medical care while travelling.
Does travel insurance cover you if you have to cancel your holiday?
Yes, it can cover cancellations caused by unexpected events like illness or natural disasters. However, coverage varies by policy and may exclude certain situations.
Will it cover flight cancellation costs?
Yes, many travel insurance policies cover flight cancellation costs if the cancellation is due to unforeseen events beyond one's control. It is important to review the policy to understand the specific coverage and any exclusions.