Travel Insurance - Don't Leave Home Without It
The Age
Monday December 7, 1992
Leaving Australia without adequate insurance cover is foolhardy. But, before choosing a policy, you need to work out what your priorities are, as VITA PALESTRANT reports.
BUDGETING for an overseas trip invariably follows the same pattern. No sooner have you taken a final ghastly tally than additional amounts insidiously appear from nowhere. It is usually something obvious, such as travel insurance.
It is understandable, too. There is nothing rewarding about poring over a handful of policies, each with its own long, dreary clauses offering protection against goodness knows what: stolen baggage, broken limbs, missed planes, vanishing hotels, smashed teeth. The list goes on and on.
But remember, leaving Australia without adequate cover is foolhardy.
The slightest medical problem in the United States can be costly (see accompanying story). Hospitals there generally will not admit you unless you can demonstrate ability to pay, such as travel insurance.
All insurers guarantee payment to overseas doctors and hospitals. Most also have a 24-hour emergency contact number for policyholders (although the services offered by these vary greatly and should be confirmed beforehand).
So what do travel insurance policies cover? They all offer a core of basic benefits: emergency medical and dental care, but often excluding pre-existing conditions; refund of deposit and cancellation charges if the trip is cancelled due to unforeseen circumstances; additional travel and accommodation expenses that unexpectedly arise and are beyond your control; loss of baggage; accidental death; personal liability; and hijacking.
If the promotional material on the front of the policy pamphlet leaves you with a warm glow, its lengthy exclusions and conditions inside will rapidly extinguish it. Many policies carry a ``last resort" clause. If you are entitled to compensation from another fund or insurer, you are obliged to claim from them first and prove that you have.
This can be a strict condition. HCF's policy states: ``If any loss, damage or expense is recoverable from any other source, we shall not be liable to pay except in respect of any sum beyond the amount for which would be payable by such other source, whether paid or not paid". There are numerous variations on this in other insurers' policies.
If you have any doubt about what the insurer's policy document means, obtain clarification in writing (if you have time).
As the table shows, premiums vary widely. The cheapest, AFTA, is $302 for a family for 31 days for top cover, while HCF, the most expensive, charges $378 for 32 days (or $342 for members, making it the same as Jetset and Thomas Cook).
However, since the benefit levels and benefits themselves vary so widely, going on price alone is unwise. Ultimately, you need to work out what your priorities for cover are and decide which insurer offers the widest coverage for the benefits you want most.
For example, if medical cover is most important, make sure the cover is generous and that it does not take an overly harsh approach to ``pre-existing conditions".
Many insurers define ``pre-existing" as a disease, ailment, physical defect or health problem for which medical, or dental, treatment was required two months before departure and/or which has been diagnosed by a medical or dental practitioner as ongoing but in remission. How long before departure the condition is viewed as ``pre-existing" varies.
Some, such as Sun Alliance, Cover-More and Flight Centres, apply a 90- day period. But if you inform them of the condition (provided you don't have a terminal illness) and get a medical certificate showing you are fit to travel, most, such as the RACV, will insure you at an additional cost _ $50 to $75 for single travellers and $100 to $150 for a family.
Most premiums and benefits depend on the duration of your holiday and your destination. Medical expenses are highest in the USA, so you are best advised to take out top cover for a trip there. All insurers offer unlimited medical expenses on their highest cover.
Insurers frequently offer several levels of insurance and recommend them for specific geographic regions. Top cover is recommended for the Americans, Japan, and sometimes Europe; middle cover for Asia; and lowest cover for the Pacific region. AFTA, Qantas, Flight Centres and Cover-More have three levels; Jetset, HCF and Sun Alliance four; Thomas Cook and the RACV have two.
As an example of how these different benefit limits work, take Jetset's four levels of cover. It highest level, Policy A+, costs $341 and has unlimited cover for loss of deposit and cancellation fees, medical costs and additional expenses. It is recommended for the Americas, Japan and Africa.
The three lower levels have smaller benefit amounts: $750,000 for Policy A (continental Europe and Scandinavia) _ cost, $281; $250,000 for Policy B (Asia) _ $239; and $125,000 for Policy C (Pacific) _ $189. For loss of baggage the benefit is $17,500, $9000, $6500 and $4500 respectively.
Sun Alliance organises its benefits differently from the others.
Although it has four different premiums for four different geographic areas it offers the same amount of cover. The premiums are $317 (USA, Canada and Japan); $286 (Europe); $245 (Asia, including China) and $198 (Pacific including Bali). Medical expenses, cancellation fees and additional expenses are unlimited and loss of baggage is covered up to $10,000 everywhere.
Most family premiums cost about twice the single cover. Significantly, more insurers now allow a single parent with dependent children under 21 to pay a single premium and automatically cover the children as well. HCF extends this benefit to include grandparents. Those that offer the benefit are HCF, Jetset, Qantas, Thomas Cook, Cover-More and Flight Centres. The last two allow for only two children.
Medical expenses Medical expenses include ambulance, medical, emergency dental, surgical, hospital, nursing home and pharmaceutical costs up to the limit specified in the policy.
No cover is given for suicide, depression, anxiety, sexually transmitted diseases, AIDS, AIDS-related conditions, the effects of alcohol or drugs, travelling against medical advice, and travelling for the purpose of medical treatment.
Most policies include a cash allowance of about $50 a day if you are in hospital longer than 48 hours.
Your insurance also will cover you for emergency repatriation back to Australia and your pre-paid costs (transport, accommodation and tour bookings) for any unused portion of your holiday.
Nearly all insurers cover the additional expense of a relative or friend flying out to help you during your illness and escort you home, providing it is on the recommendation of a doctor.
Pregnancy Many policies will not pay claims arising from pregnancy or childbirth. Most treat it as a pre-existing condition. If your doctor states you are fit to travel and you pay an extra premium, the policy will cover you. AFTA and Thomas Cook will insure you in the normal manner up to the 24th week of pregnancy and Worldcare will insure you up to the 26th week.
Age loading Senior citizens will find many insurers load their premiums and demand a certificate of good health.
Jetset and HCF add 50 per cent to the premium if you are between 70 and 74 and double it if you are 75 or more. Cover-More adds 50 per cent for people over 70 and Flight Centres add 50 per cent for those over 75.
The age loading at Worldcare does not take effect until you are 75.
Travellers aged 75 and over are asked to fill out a written application form that must be signed by their doctor. Applications are then assessed on a case by case basis.
Three insurers, RACV, Qantas and Thomas Cook, do not make an issue of age.
Cancellation and additional expenses If, at any point, you are forced to cancel your trip due to unforeseen circumstances, the insurer will cover the unused, non-refundable portion of your trip, including the deposit and cancellation fees.
Therefore, it is very important to buy insurance before making the final payment on your travel arrangements _ in this way you are covered if misfortune strikes you even before you leave the country.
You also are paid additional travel and accommodation expenses under certain circumstances. The following conditions must apply: Death, disablement or illness of you, your travelling companion, a relative or close business associate in Australia.
Strikes, riots or civil commotion.
Loss of passport, travel documents or credit cards.
Innocent breach of quarantine regulations, or a call to do jury service.
Natural disaster, severe weather conditions.
Transport accidents.
Retrenchment from usual full-time employment.
Sitting a supplementary exam.
Your tour operator's invsolvency.
Other benefits The more expensive policies in the survey tend to offer additional benefits.
Missed connection cover. This covers the additional expense of taking alternative transport if you need to get to a special event on time that cannot be delayed, such as a wedding. Policies that offer this are HCF, Jetset and Qantas.
Resumption of the journey. If you are required to return to Australia urgently because of the death of a relative, the insurer will assist you to complete your original travel arrangements. This is offered by HCF, Jetset, RACV, and Worldcare. If your house burns down, RACV will arrange to bring you back to Australia immediately and cover the cost.
Airfare compensation. If you are forced to return home as a result of an injury or illness with more than 25 per cent of the insured duration of your journey still outstanding, the cost of your original ticket will be reimbursed by HCF, Qantas, RACV and Jetset. Cover-More, Flight Centres and Thomas Cook will do the same providing more than 50 per cent of your holiday is still outstanding.
Emergency allowance Most policies have an emergency baggage allowance. If your baggage is delayed or misdirected by the carrier for 12 hours or more you are entitled to claim around $400 to $600 a family.
Under the top HCF cover (Maxi), family baggage is covered to a limit of $17,500. With some of the cheaper insurers family baggage cover is limited to $6000. RACV's top rate plan A cover has a baggage limit of $12,000.
Most policies specify an individual item limit. If your video camera exceeds this, you will need to insure it separately (or be left out of pocket).
Insurers often will deduct wear and tear from the amount they owe you.
Sun Alliance offers ``new for old" for items up to one year old.
It is a good idea to choose a company with an overseas network so you can submit claims there and not be out of pocket for the rest of your trip. Most policies guarantee settlement within 10 to 14 days. You have between 14 to 30 days to make a claim when you return.
© 1992 The Age
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