We take great time and care to plan our holiday itinerary and pack all the right things into our suitcase but what about our travel insurance? Do you opt for whatever is the easiest or cheapest option available at our travel agent? And how many of us actually take the time to read through what is covered in our travel insurance policy? You never think something bad is going to happen on holiday, but what if it does?
In a recent article, SMH’s Lesley Parker cautions globetrotters to “read the fine print of their insurance policies to avoid nasty surprises when they claim.” She points out that it is the travellers’ responsibility to make sure their insurance is correct as your travel agent only has limited legal abilities to advise on the right fit.
Did you know that travel insurance has one of the lowest payout ratios among regular types of the insurance? According to Australian Prudential Regulation Authority (APRA) data, just under half the amount collected in premiums is paid out in claims. And the latest annual report of the Financial Ombudsman Service‘s (FOS) reveals that, in the past financial year, travel insurance disputes were won by consumers only 30% cent of the time.
While the SMH reports FOS sees this as a positive result – proving that insurers are right 70% of the time and therefore the correct decision was made according to the policy, there is possibly another side to the story.
Insurance Law Service (ILS), which provides free legal advice to consumers, was quoted as saying that travel insurance has ”the most unfair terms out there” and the ombudsman’s hands are tied by what’s in the contract.
So how can you as a consumer make sure you’re not going to get a nasty surprise when you make a travel insurance claim?
- Be aware that travel agents only sell one brand of insurance. They are also limited in the level of the insurance advice they are allowed to offer you.
- Shop around for the right travel insurance and don’t select it on price alone.
- Make sure you read and understand the fine print of your travel insurance policy. Check what’s included and excluded. Does that suit the kind of holiday you’re planning or not?
- Make sure you check your policy out during the 14-day cooling-off period so you have a chance to make changes if necessary.
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