Look Before You Leap Into Insurance

Sun Herald

Sunday November 11, 2007

Jane E. Fraser

Jane E. Fraser does some sums on travel cover options.

If you're lucky enough to be a frequent traveller, stopping to add up what you spend on travel insurance in a year can be startling. While it should be considered a necessity when travelling, insurance can be a big expense if you don't shop around.

People often overlook frequent-travel insurance or the option of taking out an annual policy as opposed to policies for each trip.

The cheapest annual worldwide policy we could find on the internet was $250, an amount you could easily spend on individual policies for a couple of overseas trips.

The $250 policy had low limits for some categories of cover but there were several policies in the $320-to-$350 range that included unlimited medical cover and generous amounts for luggage and other items.

In order to determine whether an annual policy will save you money, you need to look at several factors, such as how many trips you take, their length, what parts of the world you visit and what is included in the policy.

You also need to consider whether you plan to travel alone or with your family, as some policies cover your spouse and dependent children when they are travelling with you.

To see how much an individual would have to travel to get good value from an annual policy, we used online quotes from Travel Insurance Direct (www.travelinsurancedirect.com.au).

This company has an annual policy for $340 with high coverage for areas such as medical (unlimited), luggage, cancellation and delay.

We then got quotes for four theoretical holidays: four weeks catching up with friends in Britain, two weeks lying on a beach in Thailand, four weeks travelling around North America and a weekend in Melbourne.

The individual policies added up to $356, making the annual policy slightly cheaper.

Many people would not have taken out the $36 policy for the weekend in Melbourne but here is where the annual policy earns it keep.

One of the biggest financial pitfalls travellers experience is having to pay the insurance excess if they damage a rental car.

Insurance companies encourage you to take out extra cover for this (if only they would build it into the price) and this can add considerably to the cost of hiring your vehicle.

The other reason to have insurance cover for domestic trips is that you are just as likely to lose or break your camera or some other expensive item in Australia as you are overseas.

You might also call on your insurance if you become sick or injured within Australia. Depending on your policy, you could claim for loss of income, purchasing a new air ticket home, cash expenses while in hospital and even leaving Fido in the kennel for another week.

To see if a frequent-travel policy would be good value for you, do your own sums with the help of an online provider, with a brochure in hand or by calling an insurance company.

One factor that will certainly affect the result is where you are likely to travel, as insurance for a low-risk destination, such as New Zealand, is a lot cheaper than, say, the United States, which has a very expensive medical system.

The other factor you need to take into account is whether your trips will fall within the maximum allowable number of days according to the policy.

The Travel Insurance Direct policy we looked at was for leisure trips up to 38 days and business trips up to 90 days, so it would not be suitable if you were planning to go travelling around Europe for four months.

However, the maximum length of trip varies from policy to policy and there are plenty to choose from, so it pays to search around.

Companies with annual policies include: Columbus Direct, www.columbusdirect.com.au1Cover, www.1cover.com.auQBE, www.qbe.com.auToursafe, www.compusure.com.auAussie Travel cover, www.aussietravelcover.com.auSuresave, www.suresave.com.au

FINE PRINT

When choosing a frequent-travel insurance policy, check:

? Does it have unlimited medical cover and generous amounts for luggage and personal effects?

? Will it cover you anywhere in the world, including Australia?

? Are there limitations on activities such as skiing?

? What is the excess payable on a claim?

? Does it include cover for rental vehicle excess?

? Is there a maximum number of days per trip?

© 2007 Sun Herald

Back to News Index | Back to Home