Travel insurance mitigates the financial risk of unexpected events when you are travelling away from home. When you leave Australia, you no longer have the same access to the wide range of services available to you here.
Perhaps the most significant risk mitigated by travel insurance is the cost of emergency healthcare whilst travelling to countries that do not have the free healthcare system available to us in Australia. Countries such as the United States do not offer free healthcare to its citizens and certainly don’t offer it to foreigners. Whilst US doctors will treat you in case of emergency, you could be charged thousands of dollars for treatment and be liable to pay that amount if you’re not adequately insured. The health insurance that you have in Australia will not cover the cost of medical treatment in foreign countries. If you should need emergency heart surgery in the United States, you could be personally liable for up for $50,000 if you don’t have adequate travel insurance in place.
Travel insurance will also cover the financial risk of losing your possessions when you are on holidays. If your possessions are stolen when you are holidaying, your travel insurance policy will cover the cost of replacing those items. Generally, the policy will cover replacement up to a certain value and will require you to file a police report in the country in which your possessions are stolen. There are some countries that your insurer won’t cover, and they generally won’t cover the cost of replacing items that are stolen from a car.
Your travel insurance policy will also cover the financial cost of disruption by travel companies. If your luggage is lost and you can’t get replacement compensation from the travel company, your policy will cover the cost of replacing the lost items. Similarly if your travel company does not honour flights or transfers or you cannot make them due to uncontrollable events, your travel insurance policy should cover the financial loss suffered as a result. This may be the cost of a new flight or simply the cost of changing the flight.
Legal fees up to a certain amount will also be covered by your travel insurance policy. If you should find yourself in a civil or criminal suit whilst travelling abroad, your insurance company will be able to help find you a lawyer and contribute to some of the fees for your defence. The amount your entitled to should cover the cost of most minor legal affairs, but will not generally be enough to cover long and drawn out trials for more serious matters. In these situations the Department of Foreign Affairs con often render assistance.
If your holiday should be unexpectedly extended due to health issues, flight cancellation or legal reasons, your travel insurance policy will have a provision for loss of income reimbursement. If you should have to stay an extra week to attend court or recuperate from surgery you may be entitled to a payout equivalent to the income you would have earned if you had returned to Australia and worked. There are caps on the daily rate you can be reimbursed for, and there are also time limits on the missed work you can claim.
Finally, your travel insurance policy will generally have an accidental death provision that will payout a fixed sum to your nominated beneficiary on the event that you should die in an accident whilst travelling overseas. The death benefit can be used to satisfy some of the debts that you haver left behind or possibly to repatriate your body for burial in your home country.
[succsess_box]Travel insurance is a minor expense when compared to the cost of flights to other countries and can protect you from potentially huge liabilities if something should go wrong on your holidays. Many Australian’s a complacent to think that their government will help them if they should get in to trouble. Whilst this is true to an extent, it will generally take a lot longer for government assistance to arrive than assistance you pay for yourself. Additionally, the government will not reimburse you for expenses you incur if you run in to trouble in a foreign country.[/succsess_box]