Finding better-value travel cover
Travellers can save as much as 50 per cent on the cost of their travel insurance if they look further afield for their cover.
A comparison by financial products research website MoneyHub has found wide variation in the cost of travel insurance policies, and that some of the smaller providers offer the best rates.
Researcher Christopher Walsh said well-known brands, airlines and travel agents charged up to twice as much for similar cover offered by less-known insurers.
‘‘A couple going to Europe could pay $225 with TINZ or $250 with Southern Cross, or $486 with House of Travel, $524 with ANZ and $526 with Air New Zealand,’’ he said.
The same couple going to Australia for a week could pay anything from $52 from NZ Travel Insurance, through to $102 with Air New Zealand.
Bank policies were at least 25 per cent more expensive than the cheapest policies MoneyHub found, and some were twice the price.
‘‘We are aware of the margin in travel insurance – company accounts for one travel insurer filed at the Companies Office indicated 90 per cent of premium sold was gross profit. Travel insurers spend a lot of money advertising, but less-known brands can have better prices and often provide more generous policies,’’ Walsh said.
Most policies were underwritten by one of the big-name insurers, anyway, such as Allianz, QBE, Zurich and Lloyd’s.
But there are things to watch for when you’re looking for cover.
Pre-existing conditions
Even if you have not been formally diagnosed with anything, if your insurer can prove you had been showing symptoms of a condition that later disrupted travel, your claim could be rejected.
The Insurance and Financial Services Ombudsman dealt with one case in which a woman arranged a trip, during which she suffered a heart attack. Her insurer declined her claim because her diabetes contributed to it.
Ombudsman Karen Stevens said claims declined because of a preexisting condition were a common complaint to her office.
‘‘You must tell your insurer about all conditions and symptoms you know about.’’
Sometimes controlled conditions are covered and Stevens said someone turned down by one insurer should not assume all providers would treat them the same way.
‘‘Some insurers will allow preexisting conditions provided you tell them upfront and pay a higher premium – there are some companies that provide cover for people who may not be insurable with another company.’’
Credit card policies
Some credit cards offer free travel insurance if people pay for their holidays on the card. Stevens said it was important to understand the limitations of these policies.
‘‘Limitations on credit card insurance, such as time limits and age restrictions, catch people out,’’ she said.
‘‘A claimant missed out on insurance cover for his vintage watch, which was stolen in Spain, because his trip was 100 days in total, and the credit card cover was for 90. Despite the watch being stolen on the 57th day of his trip, the policy stated that to be eligible for insurance, the trip must not exceed 90 days.’’
Length of stay doesn’t matter
Some people don’t bother with insurance if they are only going to Australia or the Pacific Islands, or only for a short time.
Walsh said it was still worth buying cover. Your bags could still get lost, or you could still be sick or injured.
He said travellers should check their medical cover went beyond the standard reciprocal agreement, and allowed them to access private healthcare in Australia.
‘‘Otherwise you might run a risk of joining a waiting list in Australia for non-urgent treatment, which makes for a miserable holiday,’’ he said.
‘‘Many New Zealanders think they are covered in Australia for any medical problem, but the reality is only emergency care would be taken care of.
‘‘Any additional costs such as ambulances, medicines and rearranging travel add up, and only travel insurance protects travellers from these unknowns.’’
Buy separately if necessary
Insurers consider older people as a higher risk and charge more for their travel insurance.
Walsh said people travelling as a group might find it more expensive to pay for group cover than to pay for an individual over 65.
‘‘Get quotes for individual policies and family policies. It’s likely that covering your partner and/or family will be cheaper with one policy than buying individual cover for each person, but not always.’’ Walsh said most insurers would cover children, free.
Buy straight away
Book insurance as soon as you pay for your holiday. You need to be able to claim for anything that stops you going.
Read the policy documents
Insurance policies can differ a lot in terms of what they include. ‘‘Most people focus on the price but they do need to be aware that if they pay less it can mean they are not getting as much cover,’’ Stevens said.
‘‘You have to be quite sure it’s suitable for your needs.’’
As more people bought cover online, she said it was increasingly important that travellers understood what they were signing up for.
Read the policy documents to understand what you will and will not be able to claim for.
‘‘A lot of people buy without ever seeing the policy documents or they choose not to read them.
‘‘That is very difficult – if they make a claim and are not covered they say ‘that’s not fair, I thought I was covered for everything’ but it’s a simple fact of no, you’re not. You’re only covered for what’s in the document.’’
Some policies do not cover certain adventure sports. Others do not like travellers to have a lot of jewellery.