Nearly 20 per cent of Australians who went overseas in the past two years did so without taking out travel insurance according to figures released by the Federal Government, which has launched a guide to help consumers buy the right cover.

The Choice Travel Insurance Buying Guide explains the importance of taking out a policy that covers travellers and their possessions and has a five-step guide to buying insurance. It also outlines money- saving measures such as comparing product prices and buying multi-trip packages.

According to the Financial Ombudsman Service (FOS), more than 200,000 travel insurance claims were paid out in the 2012-13 financial year but another 20,000 claims were unsuccessful, mainly due to travellers misunderstanding what their policy covered.

The guide recommends travellers read the product disclosure statement before choosing a policy, paying close attention to the table of benefits and policy cover, and sections dealing with pre-existing conditions, general exclusions and excess.

Case studies demonstrate the financial hardship, sometimes lifelong, people have suffered because of inadequate cover or for being under the influence of alcohol at the time of a mishap, thus invalidating their insurance. Standalone cover and policies included with credit cards are compared and there’s a list of individual considerations travellers should take into account — some insurers won’t cover pregnancy or those riding motorbikes without a motorcycle licence and there could be a higher premium for venturing off-piste while skiing.

Another section examines how insurance deals with travel agent insolvency; there’s now no fund to reimburse consumers if the travel agent they’ve booked with goes out of business and policies differ in the protection they offer travellers.

Smart Traveller (DFAT) warnings and media reports can also affect insurance cover. Some policies stipulate claims won’t be paid if travellers did not follow the advice of government warnings or media reports. But warnings can benefit travellers, too.

According to the guide, a traveller cancelled a tour to Egypt after the onset of civil strife in 2011 but a claim for costs was denied by the insurer because the tour company hadn’t cancelled the trip. FOS recommended the insurer pay out, finding that the traveller was correctly following Smart Traveller advice about travel to Egypt.

The free guide is available from


© The West Australian

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