Insuring your car, travels, health and home are necessary tasks to complete. However, many Aussies are paying unnecessary money to insure the same risk twice.
Our analysis highlights that often two or more insurance policies cover the same risks, and when this happens, the ‘contribution clauses’ kick in. This means, if cover is provided by another insurance product and a claim is made, each respective insurer would only pay their share of the claim, or sometimes not at all.
Over-insuring could complicate the claims procedure and result in paying more at renewal time should you make a claim. It is really important to be strategic with your insurance, read the fine print and double check the details to know what is and isn’t covered.”
Don’t believe us? Check the fine print of your home and contents policy and compare it to any travel, health or car policies you have, as well as complimentary insurance provided by credit cards.
We’ve decided to highlight the possible sources of double cover, which includes insurance policy basics, optional add-ons, and complimentary credit card cover.
What insurance do you really need?
Paying added rental car costs to reduce your excess, when you already have travel insurance
When you hire a car, you are asked to pay an additional fee to reduce your excess in the case of an accident. However, comprehensive international travel insurance can cover rental car insurance excess for international trips and even domestic comprehensive travel insurance can cover you for domestic trips.
For example, if your comprehensive international travel insurance covers rental car insurance excess for international trips up to the value of $4,000, and you take out the rental car excess reduction option (which is usually a per day payment), then you’re paying extra for something that you’re already covered for. In this case, if you’re taking out the international travel insurance anyway, then you can save money by not paying the excess reduction to the car rental company, and still be covered.
Taking out travel insurance to cover your personal belongings when your home and contents policy already covers them
Home and contents insurance offers added ‘extras’ to cover your personal effects, even when you take them out of your home when travelling domestically or internationally. It is worth noting that you can add additional cover for specific items too.
For example, a home and contents ‘extras’ cover policy can cover your personal effects for up to $10,000 for all items if you take them overseas. If you then take out comprehensive international travel insurance, then you’re paying extra for something that you’re already covered for. In this case, if you’re taking out the home and content ‘extras’ policy anyway, then you can save money by not paying the additional comprehensive international travel insurance, and still be covered.
Taking out travel insurance for business travel when you already have business insurance
A business’s insurance will cover valuable items owned by the business, such as laptops, mobiles, or iPads, used for work-related activity when travelling internationally or domestically. However, most insurers require you to list them on your certificate of insurance with a full description and replacement value. Business insurance doesn’t cover cash, therefore it’s advised to take out separate travel insurance to cover your money.
Taking out travel insurance to cover emergency medical or dental when you already have Medicare and private health insurance, and/or complimentary travel insurance
Medicare will cover most emergency medical expenses while travelling in Australia. In addition, many health insurance policies offer complimentary overseas travel insurance as part of their premium packages. If you don’t have private health insurance, however, don’t rely on complimentary travel insurance (offered by credit cards, for instance) for full overseas medical cover, as they often cap their cover amount.
Taking out travel insurance for your spouse or dependent children if you already have free travel insurance through your credit card
Most complimentary credit card travel insurance also covers the cardholder’s spouse and/or dependent children who are travelling with the cardholder for the entire journey. However, to be eligible for the complimentary insurance, you must pay some of your travel costs – such as airfares and accommodation – on the credit card before you travel.
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