The cost of travel insurance experienced double-digit growth in 2023, with the average policy rising 11 per cent from $337 to $375, Canstar research has found.
According to Canstar’s 2023 Travel Insurance Star Ratings report, families and seniors saw the biggest cost increase, with policy prices rising by an average of almost $50 compared to the previous year.
Canstar travel insurance expert Steve Mickenbecker said the price hike is the second straight increase for policies.
“Australians returned to the air in 2022 to a scarier Covid world and insurers provided some protection but at a steeper cost to cover the higher risk,” he said.
“Even though there are fewer insurers than in pre-Covid times, the market is a competitive one and the increased premiums are a signal to overseas travellers that the risks are real and that they should not leave home without adequate medical insurance at the least.”
How to save on policies
Canstar also urges travellers to shop around before buying travel insurance, and to refer to its 5-Star Rated international travel policies, which it says are on average 32 per cent cheaper than other policies.
“When planning for a holiday, travellers always want to find the best deals when it comes to flights and hotels, and your insurance shouldn’t be any different,” Mickenbecker said.
“Travellers who do not compare policies are likely to be paying way too much for their insurance.
“Savings are possible by taking out a policy that has lower dollar limits on claims for loss of baggage or cancellation. Losses in these categories can be in the thousands of dollars but are not likely to cause lasting financial hurt.
“Travellers should not be skimping on insurance for overseas medical care where costs can be massive and can leave the family finances severely damaged.”
Consumers should also be reading the fine print, Canstar recommends, when choosing a policy and not when making a claim.
“No insurance comes without limitations and only finding out what these are when a claim is declined can be devastating,” explained Mickenbecker.
“Policies lay out the events that can trigger a claim, the types of financial damage the insurer will pay out and the dollar limits on types of claims. Importantly they also detail the exclusions that apply and your obligations under the policy.”
Don’t drink (too much)
High-risk activities like off-piste skiing can invalidate insurance claims as can undeclared pre-existing medical conditions and intoxication.
“No insurer will pay a major claim if intoxication is the cause of the accident or medical event or other loss,” Mickenbecker said.
“Shopping around will not find a policy that gives you that permission, but insurers deal with the question of intoxication in different ways.”
“Some set a blood alcohol limit and will not pay a claim if the traveller has exceeded that limit. The hospital may have taken a blood test, which will provide evidence either way. Other insurers may rely upon a bar bill, witnesses and experts to establish intoxication.”
Meanwhile, nearly a quarter (22 per cent) of insurance providers don’t offer cover for Covid-19, but most (85 per cent) still provide cover for overseas medical and cancellations on account of coronavirus.
“Premiums are on average 40 per cent higher for policies with comprehensive Covid cover, evidencing the risk,” Mickenbecker said.
“The good news is that almost four in five insurers provide cover for Covid and it has to be worth the extra $100 on average for the peace of mind that Covid treatment will be available if needed.”
If you can’t afford travel insurance, you can’t afford to travel, goes the saying. Just be sure to shop around before you nix that trip.
Best value policies
As part of its research, Canstar compared more than 19,700 travel insurance quotes from 54 international and domestic insurance providers to determine those offering the best value for Aussie travellers.
The Outstanding Value Award winners for 2023 are:
- International: InsureandGo, Tick Travel Insurance and World2Cover
- Domestic: Qantas and Southern Cross Travel Insurance
- Seniors: InsureandGo and Southern Cross Travel Insurance
- Cruise: Go Insurance and Qantas
Last year, purchase data from InsureandGo showed nearly triple-figure growth (96 per cent) in cruise travel insurance policies among Australian travellers from June-December 2022 to January-July 2023. August 2023 alone saw a whopping 336 per cent yearly increase.
In December, Bupa Travel Insurance also crunched some numbers to find the most frequently claimed items by Aussie travellers.
