Travel Insurance

What is it and what does it cover?

Travel insurance covers the risk of you incurring unexpected expenses as a result of various events or circumstances, while you’re holidaying overseas.

A travel insurance contract is normally short-term, beginning and ending on predetermined dates – ie, the dates you depart and arrive back at home. Some travelers choose to purchase travel insurance as soon as they’ve paid for their tickets, providing cover in the event that they need to cancel their bookings.

The events and circumstances covered vary from policy to policy, and your choice will be determined to a large extent by the countries you’re visiting and the amount of time you’re away. Typically, travel insurance will cover some or all of:

Sickness developed overseas resulting in large medical bills and perhaps preventing your ongoing travel.
Theft of luggage, money, passport and travel documents.
Major transport delays disrupting your ongoing travel.
Costs associated with cancellations or alterations to your travel schedule due to unexpected events.
Excess on rental vehicle insurance.

Unfortunately your New Zealand-based health, disability, life and asset insurance policies are usually of no use to you at all when overseas, particularly in the USA where health costs can be astronomical. So to cover the types of risks outlined above, you’ll need to purchase a travel insurance policy before you leave the country.

Alternatively your travel agent can outline the options and coordinate the policy for you. But if you’re booking travel over the Internet, you’ll need to take care of your own insurance arrangements. Some credit card companies also offer automatic travel insurance for the cardholder and their partner.

What else do I need to know before buying?

There are a number of issues to be aware of or questions to ask when comparing your travel insurance options:

Be sure to read the policy information carefully to ascertain exactly what is covered. Luggage, for example, may be covered while in the charge of the airline after you’ve checked in and before you’ve left customs at your destination city, but it may not be covered from outside your hotel foyer until it reaches the airport.
Make a special effort to understand exactly what medical costs are covered, as these can be a rude surprise and a source of considerable stress when overseas.