Travel Insurance on a budget

1. Do you really need travel insurance?

No, you don't, as long as you can guarantee the following:

• You're not going to get ill while you're away
• You're not going to have an accident
• You're not going to lose anything;
• No-one's going to steal anything;
• Your flights won't be delayed or cancelled
• Your baggage won't get lost
• All your accommodation will be just fine

Do you still think travel insurance is a bit boring? Well, it's a lot less boring than stacking supermarket shelves all night to pay off a $75,000 hospital bill after you break your leg. And it's not nearly as expensive as you think.

2. Shop around!

You may not realise it, but travel agents make a lot of their profit from the so-called cheap travel insurance policies that they always try to sell you. When you've just coughed up thousands for tickets, hotels, car hire and everything else, and you're exhausted from all the negotiations, a few hundred more for what sounds like cheap travel insurance may not feel like much. That's what they want you to think!

Travel insurance from on-line companies such as Travel Insurance Direct is much cheaper and just as secure. On-line companies work with much lower overheads and higher volumes and pass the savings on to you. Shop around and you'll probably find a policy offering exactly the same benefits as the one from the travel agent, sometimes even more, for half the price or even less.

3. Read the small print

At the very least, make sure you read the section that tells you what you’re covered for and how much they’ll pay if you do need to make a claim.

Some policies appear ridiculously cheap because they’re, well, ridiculous. They don’t cover the things you might need like hospital fees, for example, or perhaps they have a very low limit to the amount of stolen money they will replace.

Some credit card companies offer so-called ‘free’ travel insurance if you pay for the trip with their card. Look carefully at exactly what you are covered for and how much they will pay. Many of these schemes don’t provide even a basic level of protection – and many people don’t realise that until it’s a bit late!

4. Make sure you have enough medical cover for the countries you are visiting

Our health is often more at risk when we travel, especially in less developed countries with poor quality drinking water and unfamiliar foods. Overseas climates can be quite different too, especially if you’re travelling to the northern hemisphere and going from summer to winter or vice versa. And we also tend to be a bit more adventurous when we’re away, boldly engaging in outdoor activities where accidents are a bit more likely.

A handful of countries have reciprocal arrangements with Australia. This means travelling Australian seniors get limited, free health care in return for their citizens getting access to Medicare in Australia.

But for travel to most countries, health care costs definitely won’t be covered without travel insurance. This means that if anything goes wrong on your travels and you need health care – a doctor, a dentist, an ambulance or even hospital – you’ll have to pay the bills out of your own pocket.

Some countries are much more expensive than others. The USA, Canada and Japan are known to be the worst. Did you know that it can cost up to $10,000 a day to be in hospital in the USA without travel insurance?

So make sure the policy covers the countries you may be visiting and make sure it covers you for a realistic amount of costs.

5. Pick a policy that’s underwritten by a reputable company

“But can I trust a cheap on-line travel insurance company?" you may be thinking. Forking out money over the internet can be nerve-wracking – how can you be sure they’ll pay up if you do make a claim? Well, the important thing to remember is that it is the underwriters who actually take the risk, not the travel insurance companies themselves.

So look for travel insurance that is underwritten by one of the big, international insurance companies and you can sleep at night. Or party all night, if you prefer.

Policies from Travel Insurance Direct, by the way, are underwritten by Allianz – one of the biggest international insurance and finance companies in the world.

6. Choose the right type of policy

There are several different types of insurance cover available so make sure you search for the one that suits you best.

For example, there are policies designed specifically for backpackers, with less emphasis on a missed connection and more focus on health cover in Nepal.

There are also travel insurance policies for business travellers, annual policies for those lucky enough to travel throughout the year and policies aimed at more mature travellers.

Travel Insurance Direct offers highly competitive policies to a wide range of travellers.

7. Think about what you might be doing while you are away

If you’re going away for a long time and you’re not too sure where you’ll end up and what you’ll do, think carefully about whether you might get up to any outdoor activities.

If you find yourself in St Moritz in January and decide to go skiing, you’ll find it can be very expensive to get special skiing insurance once you’re there. It’s far cheaper to include skiing cover in your general travel insurance policy before you go away.

8. Declare any pre-existing medical conditions

Many people ask us how pre-existing medical conditions will affect their travel insurance premium. Well, insurance companies like to know what risks they are exposed to and they will generally ask that you fill in a form telling us about any health conditions you’re already aware of. This doesn’t mean you won’t get travel insurance – it just means you may have to pay a little extra. However, if you don’t do this and an existing condition gives you trouble, you may find you’re not covered by insurance.