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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.
A recent study by Expedia shows that seven in 10 Kiwis have explored a different country in the past two years. Expedia predicts the number of New Zealanders with the travel bug will continue to grow, with three quarters (74%) who have ever travelled overseas planning international travel within the next 12 months. Of the Kiwis who have not travelled overseas in the past two years, 21% are planning a trip within the next year.
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.
For overseas travellers, 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.
Written by: TJ Ryan
There are two types of travel insurance cover policies.
According to Tourism New Zealand, domestic tourism is on the rise and is worth $18.1 billion to the economy, an increase of 6.3% in the past year. New Zealand domestic travelers tend to have very specific local excursions in mind, such as finding a local spot for skiing or cycling.
In fact, New Zealanders are so keen on domestic travel, on average, 690 New Zealanders start a domestic holiday every half hour, according to a Ministry of Tourism report.
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.
Domestic travel insurance policies usually cover you for events such as:
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.
New Zealand might be known for its cosmopolitan make-up, but residents are also travelling abroad more than ever before. According to Statistics New Zealand, 15,500 more Kiwi residents have traveled overseas in the year-ending April 2016, than the previous year.
China has seen the greatest boost, with an increase of 2000 Kiwis travelling there over the past year, followed by Cook Islands (up 1700), Fiji (up 1700) and Australia (up 1200).
International travel insurance policies usually cover you for events such as:
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:
Please note that these are a general explanation of the meaning of terms used in relation to travel insurance policy cover. Your insurance provider may use different wording and you should read the terms and conditions of your insurance policy carefully to understand what you are and are not covered for. Refer to the product disclosure statement from your provider.
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.
Based on CANSTAR’s most recent Travel Insurance Star Ratings, for a 10-day overseas trip…
New Zealand singles can expect to pay average travel insurance premiums of:
New Zealand couples can expect to pay average travel insurance premiums of:
New Zealand families can expect to pay average travel insurance premiums of:
Several factors affect how much travel insurance will cost you.
The following travel insurance providers were included in CANSTAR’s most recent Travel Insurance Star Ratings:
Here’s some more travel insurance reading for those that are keen…