How to avoid overpaying for travel cover
Yeah, probably.
…oh, I have to write more than that? Ok.
It’s pretty simple, really: travel insurance is a bit of a confusing product. If you don’t know what you’re doing and you haven’t done your homework, travel insurance costs can add up quick, and you can really end up overpaying for travel cover. That’s why we created youGo Travel Insurance – to give you the 101 on purchasing policies.
If you are thinking about travel insurance, consider these common ways customers get tricked into overpaying for cover:
Bogus benefits
Step one in getting the most for your money: actually read the benefits. We know the document is long and probably a little boring, but it’s important to know exactly what you’re purchasing. Some policies include a lot of benefits that don’t really do much – and some policies trump up the amount of excess they cover just for show. Make sure the benefits in your policy apply directly to you, and don’t buy a policy full of benefits you’ll never need.
The common sense clause
If you haven’t quite grown up yet, travel insurance may not be for you, and here’s why: the common sense factor. The whole system of travel insurance works on the presumption that customers have common sense. If you buy a policy, most travel insurance providers are putting common sense-related liabilities on you. This common sense clause is usually called reasonable care in your PDS.
Common sense tells us that leaving a bag unattended in an airport terminal is a bad idea. Common sense tells us that eating sushi with a shellfish allergy is a bad idea. Common sense tells us that getting so drunk we can’t see and then swimming in the ocean is a bad idea. Travel insurance companies often cannot account for lapses in your judgement. While this is by no means a way for companies to swindle you, it can be a tricky thing to find out after you have done something stupid and tried to make a claim.
Varying valuations
Yes, your phone may be worth its weight in gold to you, but to insurance companies it has an assigned value – and it’s not necessarily the amount you paid. As products age they lose value; a three-year-old smartphone is worth a lot less than the smartphone you bought yesterday. This all ties into the part of your PDS called item limits. Review the times you’re taking with you (cameras, laptops, personal electronics, etc.) and what type of cover is offered for these items. You will often see limits per item and can have the option to increase the limit for an additional cost. When valuing your items, remember that the limit you put should be the current value of the item, not necessarily the item’s replacement value.
Exclusion delusion
Just as important as knowing what travel insurance will cover is knowing what it won’t. Read the exclusions section of your policy very carefully, as there are often odd exceptions. While there are differences in every travel insurance provider and every travel insurance policy, here are a few general exclusions to look out for. Travel insurance probably won’t cover you for:
Warring whereabouts
It’s rarely a good idea to find yourself in the middle of a warzone – and here’s one more reason. Most companies won’t pay for claims that arise as a result of war, invasion, hostilities (declared or not), rebellion or revolution. If political tensions are a-brewin’, just stay at home. Not only will your travel insurance policy not cover any damages or flight cancellations, but you could be caught in a life-threatening situation.
Pregnancy
Well, that’s not entirely true, but there are a lot of exclusions when it comes to pregnancy. Companies vary how late they will cover you for (youGo caps pregnancy travel cover at 26 weeks). Further coverage restrictions might arise if there have been complications with this or any previous pregnancy, or the conception was medically assisted (including hormone therapies and IVF). Ultimately, the chief concern here is the health of your baby, so you may have to undergo an online medical assessment before a policy is issued. Expectant mothers should consider whether travel is necessary, particularly beyond the 20th week of pregnancy.
Illicit items
Bringing something back home that you shouldn’t be? Don’t be surprised if your travel insurance companies has little sympathy for your luggage seized by customs. Most (if not all) travel insurance providers refuse to pay for items lost because they were taken by customs. Remember these items are prohibited or restricted when re-entering Australia:
- Illegal drugs (penalties include jail time, as well)
- Steroids (you must have a permit)
- Firearms, weapons and ammunition (these may be subject to import requirements, such as unique serial numbers and safety tests)
- Illegal pornography (look out for films or items deemed ‘highly offensive’ by the Australian government)
- Food, plants and animals (these can harm the ecosystem)
- Protected wildlife (these include orchids, ivory products and caviar).
Claim blame
How do you make a travel insurance claim? Most people who purchase travel insurance really don’t know. The simplest advice we can give is to document everything. In the event of an emergency, it may be difficult to remember, but your travel insurance company will need all of your receipts, bills and reports. It is difficult for companies to prove a claim is valid without any substantiating information.
Now, we want to be clear: no travel insurance company out there is trying to trick you. We want you to be safe, but sometimes keeping you safe can get a little complicated. Be sure to read your policy before purchasing, and call the company’s customer service reps if you have any questions (you can contact youGo customer service here). Get the right cover for your trip and get going.