Forget The Luggage, Maybe, But Not The Travel Insurance

Newcastle Herald

Thursday December 8, 2005

SMH

IN the hectic build-up to end-of-year holidays, it's easy to overlook a vital aspect of your trip: travel insurance.

For many people, it's an afterthought. They've already committed a lot of money and time to organising the trip, then human nature being what it is they want to spend as little as possible on travel insurance.

It can be a case of penny wise, pound foolish. A medical evacuation from the US costs $75,000 to $95,000, and from Bali more than $60,000. Returning a body from Europe costs $10,000-plus, and hospital costs in South-East Asia exceed $800 a day.

The Department of Foreign Affairs and Trade helps more than 20,000 Australians a year who suffer a medical emergency or theft overseas. This includes about 700 hospitalisations, 600 deaths and 100 medical evacuations. But still consumers do not spend enough effort making sure a policy suits them. If they make a claim, they may get a rude shock.

Common problems include disputes over whether luggage was left "unattended in a public place", pre-existing illnesses, the death of elderly relatives and restrictions on the free cover by some credit cards.

The Insurance Council of Australia says assessment of cover is based on mainly age, destination, length of stay, and pre-existing conditions.

The main areas insured are medical and hospital expenses, evacuation, lost or stolen luggage, trip cancellation and personal liability.

Although Australia has reciprocal rights with some countries for Medicare-type cover, this is subject to the availability of a public bed otherwise you will pay private hospital costs. In the US, these may be 10 to 15 times higher than here. The council recommends full medical cover for the US, Japan and Europe.

It urges consumers to advise their insurer of any pre-existing conditions suffered by them, their travelling companions and close relatives. This usually includes pregnancy.

Another tricky area is exclusions, such as war, hijacking, terrorism, luggage left unattended in public and the insolvency of, say, an airline or cruise company.

Also check the fine print on hazardous activities such as skiing, horse riding and whitewater rafting.

Although many people still leave it all up to their travel agent, the Australian Consumers Association warns that this can be an expensive option.

Online products may be as low as half-price, partly because travel agents may receive hefty commissions.

Websites include 1cover (1cover.com.au), Aussietravelcover (aussietravelcover .com.au), Columbus Direct (columbusdirect.com.au), Neville Ward Direct (nevward.com.au) and Travel Insurance Australia (travelinsuranceaustralia.com.au), as well as some of the big insurance companies.

Consumers should still read the product disclosure statement and not simply go for the lowest price.

Those over 65 or with medical conditions or planning hazardous activities need to speak to the insurer, to ensure the policy is apt.

The consumers association recommends you buy insurance when you book the holiday, or pay the deposit, rather than the day before you leave.

That way you're covered for any expenses if you have to cancel.

The cheapest option is the free insurance provided through banks and charge card companies if you buy your airline tickets or accommodation using your credit card.

Tempting as free insurance sounds, cardholders should read the full product disclosure documents and not rely on the marketing brochures. It is not likely to be extensive or tailored cover. SMH

© 2005 Newcastle Herald

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