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What is travel insurance?

Travel insurance is insurance cover for emergencies or accidents that might happen to you or your belongings while you are on a holiday away from home. Travel insurance will cover you for different things, depending on whether you are taking a trip within New Zealand or overseas.

Why do you need travel insurance?

New Zealanders often start their travel planning with a bucket list of destinations and experiences – but you can be sure an expensive medical mishap is not on anyone’s list!

The New Zealand Government website, SafeTravel, recommends travel insurance for anyone taking a trip away from home, especially overseas. If you don’t have travel insurance and you lose your luggage or have an unexpected accident, medical emergency, or legal incident, you and your family will have to pay for all the costs on your own.

Things like changing flight plans can be expensive, but hospital bills are even worse. A medical emergency can cost you thousands, or even hundreds of thousands of dollars – and chances are you have not brought that much money with you on your trip. If you have travel insurance, on the other hand, you can travel confidently knowing you can get financial help in an emergency.

What else should you do before you travel?

For overseas travelers, you should also check the SafeTravel Travel Advisories page to see what the risk of travelling to your chosen countries is. If a country is flagged as “do not travel”, be aware that you may not be able to obtain insurance for the trip.

Next, you should register your plans with SafeTravel, so that someone knows where you’ve gone and how to reach you in an emergency.

Make sure you have a copy of all your documentation with you – and that you leave a copy of all your documentation with someone back home.

Also, keep on hand the contact details of the New Zealand Embassy in your country of destination – just in case you need it.

There are two types of travel insurance cover policies.

1. Domestic travel insurance:

According to Statistics New Zealand, as at March 2018, domestic tourism is on the rise and is worth $23 billion to the economy. This is an increase of 6.5%, compared to March 2017. New Zealand domestic travelers tend to have very specific local excursions in mind, such as finding a local spot for skiing or cycling.

But Kiwis are not assured a mishap-free trip just because they are keeping their venture to home soil. It’s definitely worth thinking about insurance in case you get stuck.

What does domestic travel insurance cover?

Domestic travel insurance policies usually cover you for events such as:

• Lost or stolen luggage or other items.
• Cancelling your trip unexpectedly due to illness, accident, holiday leave being revoked, or a natural disaster at home or at your intended destination.
• Rental vehicle excess you have to pay if you have an accident driving a hire car.
• Legal liability; the vast majority of policies researched include coverage for legal liability. Don’t take this as an excuse to break the law though – you may end up invalidating your policy!

What is not generally covered by domestic travel insurance?

One thing domestic travel insurance does not include is medical cover. However, that’s not a big problem because, as long as you’re in New Zealand, you can still use your private health insurance if you have it.

Domestic travel insurance policies also typically exclude certain “hazardous pursuits” from your coverage. If you’re doing dangerous activities on your holiday, like skiing, scuba diving, bungee jumping or rock climbing, you need to disclose it on your application. However, even if you disclose it, you still might not be covered for an accident that happens because of that activity as it may be excluded from the policy. Ensure that you read your policy terms and conditions carefully.

2. International travel insurance:

What does international travel insurance cover?

International travel insurance policies usually cover you for events such as:

• Medical or dental emergency. Typical emergency medical cover will include hospital admission, emergency care and medical evacuation to another country’s hospital. If your medical situation is not an emergency, we recommend you telephone your insurer before you have any treatment done, to check if you’re covered for it.
• Repatriation. If tragedy strikes while you are away, repatriation covers the cost of flying your body and belongings back home to New Zealand. Some travel insurance funds also include a separate sum for funeral expenses. If you fall sick overseas and need to be evacuated back to New Zealand for medical treatment, your travel insurance policy should cover that also.
• Lost or stolen luggage, passport or other items. Replacing luggage and travel documents is the most common claim for travel insurance – and one of the cheapest.
• Cancelling your trip unexpectedly due to illness, accident, holiday leave being revoked, or a natural disaster at home or at your intended destination.
• Legal liability if you break a local law and need a lawyer and/or interpreter. Ignorance of the law is no excuse in most countries, so make sure you read up on SafeTravel for things you should know before you go! For example, in some Muslim countries, it is an offence to wear a bikini on a public beach. If you break a law on purpose, your travel insurance policy will not cover your legal fees.

What is generally not covered by international travel insurance?

No travel policy will cover you for every single thing that might go wrong while you’re away, so it’s important to read your policy terms and conditions carefully and know what is not covered.

Some common international travel insurance exclusions are:

• High-risk countries. Check the government’s SafeTravel website for the travel advisory status of your destination. Countries deemed “do not travel” may not be covered under your policy.
• Risky behavior. Any injury or loss caused by you behaving recklessly while you were under the influence of alcohol or drugs can be excluded from cover. This doesn’t apply to a medication prescribed to you by a doctor and taken correctly according to the instructions.
• Pre-existing medical conditions. If you have experienced symptoms of a condition before travelling, even if the condition wasn’t diagnosed, medical expenses for it will generally not be covered. Read your policy terms and conditions carefully.
• High-value items. Many policies have a dollar limit that you can claim for each item, which may not be as much as it costs to replace the item.
• Notification period. Your policy may specify that you need to notify your insurer of an accident or event within a specified timeframe such as 24 hours. It’s important to be aware of that notification period and call your insurer as soon as you can.
• Loss of items left unattended. Keep an eye on your belongings at all times. You might not be covered if you leave your wallet and keys wrapped in a towel on the beach, or hidden in a shared room, or even in your checked-in luggage.
• Hazardous pursuits. Dangerous activities such as scuba diving, bungee jumping and hang-gliding may be excluded, but they can often be added to your policy for an extra fee. Out of the international travel insurance policies Canstar has researched, most included the following activities as either standard or optional: motorbike and scooter riding, snow sports, jet skis and water sports. However, most of the policies we researched did not include rock climbing or yachting in international waters.

• Accident: An unexpected, unforeseeable, or unusual event that was unintended and caused loss or harm while you are on a trip covered by your policy.
• Accommodation: Any type of dwelling or lodging that you pay a fee to stay in overnight.
• Additional expenses: Additional expenses for accommodation and transportation that occur because of events such as illness, natural disasters, loss of travel documents, and transport union strikes.
• Beneficiary: The person who would receive compensation from your insurance policy if you were to pass away during your travels.
• Benefits:What your insurance provider gives you according to the terms of your policy. Benefits can apply if you make a claim or they can apply if a certain event happens, e.g. during an emergency.
• Cancellation or amendment costs: The cost of cancelling, changing, or rearranging your journey because of unforeseen circumstances outside your control such as illness, accidents and extreme weather events.
• Claim:A request for your insurance provider to pay certain expenses back to you in accordance with your policy.
• Cover or coverage: The extent of protection given to you by your policy. If you are covered for an event, it means that you can claim back from your insurance provider a specified amount of expenses you incurred during that event.
• Current market value: The amount of money you could get for an item if you sold it in the current local market. This amount is based on the original cost, the current condition and age of the item, and what it could be sold for in its present state.
• Damage:Harm or injury to a person or property, resulting in the property losing value or not being able to be used properly.
• Disability: A physical or mental condition that restricts a person’s movements, senses or activities. A disadvantage or handicap, especially one imposed or recognised by the law.
• Emergency medical care: Medical care that is needed in an unexpected emergency. This does not include any type of regular medical care or foreseeable medical needs.
• Endorsement:Any special condition listed on your insurance policy as an extra reason for you to buy the policy.
• Excess:The excess is an amount that you pay instead of the insurer, e.g. “the first” $250 or $500 of a claim. Insurers usually have either a policy with different excess options that you choose between, or separate policies that each have a different excess amount. You can pay a lower premium if you have a higher excess, but you need to be sure that you could afford to pay the excess unexpectedly if you had to make a claim.
• Exclusions: Anything that is not covered by your policy. Common exclusions include travel to high-risk countries, dangerous activities such as bungee jumping, risky behaviour such as taking alcohol or drugs, pre-existing medical conditions, and loss of items left unattended.
• Home:Your usual place of residence in New Zealand.
• Incidental: Costs associated with an unexpected covered event, which are not directly related to the event.
• Inclusions:Any event, item or expense that is covered by your policy.
• Injury:Anything that physically harms you and occurs by accidental or violent means, which is covered by your policy.
• Journey:One of the terms insurers use to talk about the period you’re covered for, from the time you leave home until the time you return to your home. Also known as your trip, voyage, or travels.
• Limit / Benefit limit:Policies have a limit on the amount of benefits you can claim per year or per journey.
• Luggage and personal effects:Personal items that you own or carry with you on a trip that is covered. This includes but is not limited to: suitcase or backpack, clothing, jewellery, computer or laptop, music players, and other portable electrical devices or equipment.
• Medically necessary:Medical treatment that is needed to preserve your health, is suitable to treat your symptoms, and can be safely provided in your current location. This does not include treatment or procedures that are performed in your current location because it is merely convenient.
• Natural disaster:An event caused by nature and not by any human activity, including earthquakes, storms, bushfires and floods.
• Overseas medical expenses:Expenses incurred overseas for ambulance transport, hospital admission, surgical nursing, and emergency dental treatment.
• Period of cover:The time your travel is covered by your policy.
• Personal liability cover:Cover for costs incurred for which you are legally liable. You are legally liable if your negligence causes loss or damage to someone else’s property. Personal liability also covers you for injury to a person who is not a member of your family or travelling party. Personal liability cover does not cover damage you caused deliberately or that breaks the law; damage caused by your business or your employee; your ownership or use of a vehicle, aircraft or watercraft; or you passing on an illness to someone else.
• Policy: The travel insurance contract you have taken out with an insurance provider.
• Pre-existing condition:A medical condition that existed in any form before you signed up for the insurance policy, whether or not you had your symptoms examined by a health practitioner. Your policy may usually list a time limit for the condition to be pre-existing, e.g. you have seen a medical practitioner in the past 90 days before you started your journey, or you have been prescribed a medication within the past 60 days.
• Premium:The amount you pay your insurance provider for your travel insurance cover. Your premium must be paid on time for your travel to be covered.
• Reasonable:When associated with an expense or cost, “reasonable” refers to what is usual, needed, and matches the standards of your previously scheduled travel.
• Refund:Cash or company credit that can be given to you as reimbursement for your expenses, according to the terms of your policy.
• Rental car insurance excess: The excess charged if your hire car is damaged or stolen.
• Resumption of journey benefit: The benefit you receive if you claim the expense of resuming your travels. You can make a claim if you had to return to New Zealand suddenly due to a serious injury, illness, or the death of one of your relatives or business partners in New Zealand.
• Sudden illness or serious injury: Illness or injury that occurs during your period of cover and requires immediate treatment by a health practitioner.
• Travel delay: Scheduled transport that is delayed by over 6 hours. Scheduled transport can include plane flights, trains, trams, buses, ferries or cruises.
• Unforeseen:Any circumstance that is out of your control. This can include illness, accident, cancelled flights, or natural disasters.

When you compare it to the cost of your airfares, accommodation, and activities, travel insurance is a tiny add-on that could save you a lot of stress. The cost of international travel insurance depends not just on who you’re travelling with, but on the destination you’re headed for.

How much does travel insurance cost

Based on Canstar’s most recent Travel Insurance Star Ratings, for a 14-day overseas trip…

New Zealand singles can expect to pay average travel insurance premiums of:

• $122.48 travel insurance for South Africa
• $165.18 travel insurance for the USA
• $114.67 travel insurance for China
• $97.24 travel insurance for the Indonesia
• $132.05 travel insurance for Japan
• $125.48 travel insurance for France
• $110.65 travel insurance for the UK
• $79.89 travel insurance for Fiji

• $65.38 travel insurance for Australia
• $84.79 travel insurance for Cruise Fiji
• $75.76 travel insurance for Cruise New Zealand

New Zealand couples can expect to pay average travel insurance premiums of:

• $240.59 travel insurance for South Africa
• $301.32 travel insurance for Argentina
• $324.32 travel insurance for the USA
• $219.48 travel insurance for China
• $187.73 travel insurance for Indonesia
• $256.74 travel insurance for Japan
• $241.19 travel insurance for France
• $212.72 travel insurance for the UK

• $160.53 travel insurance for Fiji
• $121.90 travel insurance for Australia
• $164.85 travel insurance for Cruise Fiji
• $148.61 travel insurance for Cruise New Zealand

New Zealand families can expect to pay average travel insurance premiums of:

• $251.42 travel insurance for South Africa
• $312.81 travel insurance for Argentina
• $337.88 travel insurance for the USA
• $227.57 travel insurance for China
• $194.33 travel insurance for Indonesia
• $259.11 travel insurance for Japan
• $250.28 travel insurance for France
• $221.30 travel insurance for the UK

• $168.60 travel insurance for Fiji
• $128.97 travel insurance for Australia
• $177.86 travel insurance for Cruise Fiji
• $158.56 travel insurance for Cruise New Zealand

You can research travel insurance policies on our Canstar website.

What affects the cost of travel insurance?

Several factors affect how much travel insurance will cost you.

• Where you go: The country you’re travelling to changes the amount your travel insurance will cost because each country has a different level of risk for various events happening.
• The type of trip you are taking and whether it involves plane flights, a boat cruise, train travel or bus trips
• The length of your trip the longer you are away, the higher the cost, generally, of your travel insurance
• The activities you will be participating in while away: Risky or otherwise dangerous activities can be either excluded from your travel insurance policy or covered for an increased cost.
• Your age: As you get older, the cost of your travel insurance will tend to rise.
• Pre-existing medical conditions
• The level of cover or limits you would like
• Optional extras: Some insurance providers offer optional extras including cover for:
  • Travel delays
  • Trip cancellations
  • Baggage delays
  • Extreme sports
  • Resuming your journey after cutting the trip short
  • Carrying valuables like iPads, cameras, phones, or jewellery
  • Pet care if your return is delayed while your pet is in boarding
  • Loss of income due to injuries while travelling

The following travel insurance providers were included in Canstar’s most recent Travel Insurance Star Ratings:

Trans-Tasman Travel Insurance Providers

1. 1Cover Direct Insurance NZ
2. AA Insurance
3. Air New Zealand
4. Air Pacific
5. American Express NZ
6. AMI Insurance NZ
7. AMP Bank NZ
8. ANZ Bank NZ
9. Aon NZ
10. BNZ
11. Chubb Insurance NZ
12. Cigna Insurance
13. Columbus Direct Travel Ins NZ
14. Countdown
15. Cover-More Travel Insurance NZ
16. Downunder Insurance NZ
17. House of Travel NZ
18. nib NZ
19. NZ Travel Insurance
20. Southern Cross Travel Ins NZ
21. STA Travel NZ
22. State
23. TINZ
24. Tower Limited
25. Travel Insurance Direct NZ
26. Virgin Australia NZ
27. Webjet NZ
28. Westpac NZ
29. World Nomads NZ
30. Worldcare NZ

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