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Travel insurance in Australia gives you peace of mind by offering cover for unforeseen travel expenses, such as medical expenses, lost luggage, emergency assistance or trip cancellation fees. Typically, you will pay a policy excess before the insurer provides their payout unless you pay an additional premium to remove your excess.
Your insurance company will either deduct the policy excess from any settlement or they may ask you to pay the excess upfront after you lodge a claim. The excess amount is an amount of money that you choose or accept when you purchase your travel insurance policy. Adjusting it could impact your overall insurance premium. For example, opting for a higher excess amount could lower your travel insurance premium and vice versa.
A travel insurance excess is included with most travel insurance policies. By choosing a policy with an excess, you agree to either have this set amount deducted from any payout or settlement determined by your insurer, or you may need to pay this set amount for each claim before your insurer considers your claim. This can make the policy more affordable upfront, as most insurers will reduce the premium if you select a higher policy excess.
If you desire comprehensive travel cover that provides more compensation if you incur an insurable loss, you might look into a policy with no excess.
Always read your Product Disclosure Statement (PDS) to ensure you understand the inclusions and exclusions of your policy, and read the Target Market Determination (TMD) to help you decide if the product is suitable for you.
The cost of travel insurance for Australians can vary widely based on several factors, including the length of your trip, destination, age, and level of cover you choose. Here’s a breakdown of the key factors affecting travel insurance costs and a general price range.
You can also use our travel insurance comparison service to compare travel insurance quotes from different providers and find a level of cover that suits your needs.
Yes, the excess you choose can directly affect the premium you pay for your travel insurance. A higher excess generally reduces the cost of your premium because you’re agreeing to cover more of the claim yourself. On the other hand, selecting a lower excess (or opting for no excess at all) may contribute to higher or additional premiums because the insurer takes on more risk.
It may be possible to get travel insurance with no excess if you opt to pay extra to remove the policy excess from your travel insurance policy. The option to reduce the excess amount is not available for all policies. If an insurer offers this option, you can select it when you purchase your policy.
For instance, if your policy includes an excess of $200 and you decide to purchase an excess waiver, you won’t need to pay the $200 if you make a claim. Removing the policy excess means avoiding out-of-pocket payments when claiming, but it comes with a higher premium.
An excess waiver can be useful for travellers who take lengthy vacations, increasing the likelihood of multiple claims, or those who don’t want to worry about additional charges.
The general advice for whether you should remove the excess on your travel insurance policy comes down to your personal preference. If you like having peace of mind and don’t want to deal with out-of-pocket expenses when making a claim, paying for a no-excess policy might be worthwhile.
However, if you’re travelling on a budget or don’t expect to make any claims, you might be comfortable choosing a policy with an excess to keep your premium low.
When deciding on the right travel insurance policy and excess for you, carefully consider your travel plans, risk tolerance and budget.
These are a few of the factors that you should consider when choosing your travel insurance excess:
If you prefer peace of mind and don’t want to worry about unexpected expenses while travelling, paying more upfront for a no excess policy or paying extra to remove your policy excess could be worthwhile. However, if you’re more focused on keeping your premium low and are comfortable with the potential cost of paying an excess in the event of a claim, selecting a higher excess is a practical way to save.
Generally, the excess is per person when making a claim unless your policy wording states otherwise. If the policy documents state the excess must be paid per incident, you will have to make multiple excess payments if you make multiple travel insurance claims in a single trip.
For example, suppose you have an excess of $200 on your policy, and you have to go to the hospital to be treated for food poisoning. Your provider will reimburse you for the hospital expenses minus the $200 excess you have to pay if your claim is successful. Then if your bag with all your belongings (laptop, passport, and wallet) is snatched on the same trip, you will have to pay another $200 excess, as the robbery is considered a separate incident, bringing your total out-of-pocket payment to $400.
As the Executive General Manager of General Insurance, Adrian Taylor believes in educating customers about the importance of travel insurance so that anyone can kick back and make the most of their time away from home. While no one wants a disrupted holiday, a suitable travel insurance policy can provide a financial safety net for yourself, your belongings and your trip in case things go wrong.