CHOICE travel insurance buying guide: COVID-19 edition
Who is CHOICE?
Set up by consumers for consumers, CHOICE is the independent consumer advocate that provides Australians with information and advice, free from commercial bias. Visit choice.com.au.
Read on to learn about:
- Travelling during the COVID-19 pandemic
- Does international travel insurance cover COVID-19
- What to look for when buying travel insurance during COVID-19 (checklist)
- Travel insurance and Smartraveller advice
- Do you need travel insurance to go to New Zealand
- How to make your travel plans COVID-safe
Travelling during the COVID-19 pandemic
A travel ban has largely stopped Australians from holidaying overseas, but it hasn’t stopped their desire for travel.
There are a small number of reasons you can travel overseas:
- You’re travelling to a destination that’s exempt from the ban, such as the travel zone with New Zealand.
- You’ve been given an exemption to travel by the Department of Home Affairs.
The Home Affairs website has more information on exemptions.
Does international travel insurance cover COVID-19?
Some travel insurers now offer limited cover for COVID-19. It will likely only cover medical, quarantine and cancellation costs if you or someone you’re travelling with tests positive to COVID-19. But travel insurance is unlikely to cover cancellation if you’re not able to travel due to government travel bans.
If you have an international travel exemption, some Australian travel insurers may cover you. But cover may not be available for all destinations and may not include cover for COVID-19. Some international insurers may provide cover that includes COVID-19, but you may only be able to buy it once you’ve left Australia.
Some tour operators or airlines are offering complimentary ‘COVID insurance’ when you book a ticket or tour with them. Always read your travel insurance policy to understand what it offers you. Complimentary ‘COVID insurance’ might only cover COVID-19, and nothing else. And it might be issued by an overseas insurance company, which means it’ll be subject to the regulations of that country. If that’s the case, it probably isn’t a good substitute for a comprehensive Australian travel insurance policy.
Even if you can’t get cover for COVID-19, taking out travel insurance is still essential. Travel sometimes doesn’t go as planned. If you get sick overseas, have to cancel your travel plans, or your luggage and essential documents get lost or stolen, and you don’t have travel insurance, you’ll be reaching into your own pocket to cover the costs. If you’re not convinced, see CHOICE advice on why you should get travel insurance.
Check the following cover details:
- Is your destination covered? Insurers might limit cover to countries that have a travel zone agreement with Australia, such as New Zealand, or to countries that Medicare has a reciprocal agreement with, such as the UK.
- Are you covered for the full duration of your trip? For example, can you extend your cover should you be overseas for longer than planned because your flight gets cancelled? Or if quarantine-free travel is paused?
- Are stopovers on the way to your destination covered? Is there a restriction on the amount of time you can be at the stopover location? What happens if you remain stuck for an extended period?
- Are you covered if you can’t travel, or your stay gets extended, because you or your travelling companion tests positive to COVID-19? What if you have to go into isolation because you’re a close contact of someone who tested positive?
The Weaver* family were relieved they had travel insurance when they needed to cancel their holiday. They wanted to go skiing in New Zealand. But a few days before they were due to depart, their 12-year-old daughter Ruby got cold symptoms. A COVID-19 test showed she was positive. Ruby and her whole family had to isolate and their travel insurance paid their cancellation costs.
* Names have been changed.
- Are you covered for cancellation costs if your business partner or a relative back home gets sick with COVID-19 and you need to return earlier than planned?
- What happens if you were going to stay with someone but they’ve contracted COVID-19? Or your accommodation or tour company gets closed down because of COVID-19? Are your additional expenses covered?
- If you’re planning to go on a cruise, be extra careful. Some travel insurers currently don’t offer COVID-19 cover for multi-night cruises.
- Are you covered for claims caused by government travel bans, ‘Do not travel’ advice, border closures, or mandatory quarantine/self-isolation requirements at your destination?
The Bradstone* family from Melbourne wanted to meet up with relatives in Queenstown, New Zealand. But because of a lockdown of their hometown, Melbourne, they needed to cancel their travel. Their travel insurer denied their claim for cancellation costs.
* Names have been changed.
- If you’re an essential healthcare worker, including a pharmacist, nurse, doctor or paramedic, make sure you’re covered if your leave gets cancelled due to a COVID-19 outbreak.
To get answers to these questions, ask your travel insurer and read the product disclosure statement (PDS). For more information, read our advice on how to read the PDS.
Travel insurance and Smartraveller advice
Smartraveller, managed by the Department of Foreign Affairs and Trade (DFAT), assigns an overall advice level to 177 countries. This advice level can affect your travel insurance cover. The advice levels are:
- Level 1 – Exercise normal safety precautions. COVERED.
- Level 2 – Exercise a high degree of caution. COVERED.
- Level 3 – Reconsider your need to travel. CHECK.
- Level 4 – Do not travel. USUALLY NOT COVERED.
Destinations with advice levels 1 and 2 are usually covered by travel insurance. Destinations with advice level 4 usually are not. It varies with level 3. It’s important to check the reason that the country is under advice level 3, as you may not be covered for it. International travel has become more complex and uncertain. Always check details of your insurance coverage.
Case study: Ignorance is no defence
A week after a volcanic eruption made world news, Sameer* booked a trip to Bali. He assumed the emergency would be over by the time he was due to fly a month later. Unfortunately, the volcano continued to erupt and Sameer’s flight was cancelled. His insurer declined his claim because he’d bought the flight and insurance after DFAT issued a travel alert about the volcanic eruption, and after it had been in the news.
* Name has been changed.
Do you need travel insurance to go to New Zealand?
New Zealand is a popular travel destination for Australians. Research shows that more than one in three Australians who intend to travel in the near future want to make use of the travel zone and enjoy quarantine-free travel to New Zealand. Travel insurers have released policies that include limited cover for COVID-19 for travellers to New Zealand.
Travel insurance is essential. Buy your insurance at the same time as you book your trip so you’ll be covered if you have to cancel for some reason before you go. For more information, check the travel insurance guide on Smartraveller.
Quarantine-free travel to New Zealand may get suspended during regional outbreaks. To keep up to date, subscribe to the latest travel advice for New Zealand on Smartraveller.
Medical costs in New Zealand
New Zealand and Australia have a reciprocal healthcare agreement. This means that Australian travellers can access New Zealand’s public health service in an emergency, and vice versa. You’ll still have to pay some fees for treatment and medication. And it’s important to remember the agreement isn’t a replacement for travel insurance.
For example, reciprocal health care doesn’t cover you for free or subsidised care by a general practitioner or ambulance, and if you get seriously ill, medical repatriation is very expensive and only covered by travel insurance.
Remember to take your Medicare card with you. You’ll need it, along with your passport, to prove that you’re eligible.
Accident cover in New Zealand
In New Zealand, accident victims can’t sue a third party for compensation. Instead, the Accident Compensation Commission (ACC) covers the cost of medical care within New Zealand.
This means it’s essential that visitors to New Zealand are covered by travel insurance for repatriation, loss of income and disruptions to travel plans. You won’t be compensated for those even if the other person was 100% at fault.
Case study: Cancellation after earthquake covered
Ava O’Brien* was due to travel to Christchurch at the end of September 2010. In early September there was an earthquake in Christchurch. Aftershocks were ongoing, and the Mayor of Christchurch issued a warning to limit travel to the area. Ava cancelled her trip and made a travel insurance claim. But, as her flight wasn’t cancelled and her hotel stayed open, her insurer denied the claim, saying that ‘Change of mind’ was not covered. Ava went to the Australian Financial Complaints Authority, which ruled in her favour, saying her decision to cancel her trip was reasonable under the circumstances.
* To protect privacy we have changed names and some details.
How to make your travel plans COVID-safe
Travelling during a pandemic means you need to be prepared for your travel plans to be interrupted at short notice. And if you’re making a booking for travel while borders are still closed, you need to be especially careful.
As travel insurance may not protect you from government border closures, general lockdowns or quarantine requirements in your destination country, the key is to book only with providers that allow you flexibility should things change or borders open later than anticipated.
- If travelling from Australia, check the rules for departure and apply for any relevant exemptions.
- Check the rules for travelling to your destination country. For example, are there any entry requirements? Do you need to be fully vaccinated?
- Consider going to just one or a few places in one country at a time rather than travelling to several countries.
- Read the terms and conditions before you book. Make sure you’re allowed a refund.
- Book flexible tickets for flights.
- Make sure your hotel booking can be cancelled or at least changed.
- If you book through a travel agent or booking site, make sure they don’t charge an extra cancellation fee.
- Consider booking at the last minute so you’re up to date with the latest travel restrictions.
- Pay by credit card, as this allows you to pursue a credit card chargeback if something goes wrong.
- Keep on top of the latest travel advice and requirements at smartraveller.gov.au. Travel restrictions can change at short notice.
- If you have to cancel, check the CHOICE article on COVID-19 travel cancellations for advice on getting your money back.
- Take out travel insurance but make sure you can cancel it and at least get a partial refund for it if you have to cancel your travel or it’s cut short because of COVID-19 border closures.
Case study: Travel insurance refund smaller than expected
Angela Wang* planned to take her son David on a private air tour starting in Darwin and ending in Melbourne. Because of a Melbourne lockdown, the tour company cancelled her booking and gave her a refund. Angela contacted her travel insurer asking for a refund of the $400 travel insurance premium. The travel insurer said they would only give her a partial refund and issued her a refund of less than 10% of the premium.
* To protect privacy we have changed names and some details.