What is a travel insurance excess?

Average customer rating: 4.3/5
Written by Chloe XY Chin
Reviewed by Adrian Taylor
Updated 21 October 2024

Understanding travel insurance excess

young women with credit card travel insurance on holidayTravel 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.

Do you need an excess on travel insurance?

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.

Cost of travel insurance

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.

  • Destination: Travel insurance tends to be more expensive for certain regions due to higher medical costs or greater risks. For example, policies that cover travel to the United States, where medical treatment is very expensive, can be pricier than those covering Europe.
  • Duration of your trip: Longer trips typically result in higher premiums, as the likelihood of a claim increases the longer you are away.
  • Level of cover: Basic policies covering essentials like emergency medical expenses and personal liability are generally cheaper, while comprehensive policies that include trip cancellation, lost baggage, and additional benefits usually cost more.
  • Pre-existing medical condition: If you have pre-existing medical conditions, you might need additional cover, which can increase your premium.
  • Annual multi-trip cover: Frequent travellers can be covered for an entire year from the start of their policy date. The policy may cost more upfront but can be more cost-effective in the long run if you are planning to take three or more trips, up to a set maximum trip length in a 12-month period.

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.

Will the excess affect my travel insurance premium?

More on travel insurance excess

Can I get travel insurance with no excess?

Is it worth removing an excess on travel insurance?

What excess should I choose for travel insurance?

Do multiple claims on the same trip mean multiple excess charges?

Meet our travel insurance expert, Adrian Taylor

Adrian Taylor
Executive General Manager – General Insurance

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.