Don't Get Bitten By Insurance Sharks

Sun Herald

Sunday October 8, 2006

Debra Cleveland

Debra Cleveland on how to find the best travel cover.

FOR many consumers, travel insurance is a "grudge" purchase - after paying thousands of dollars for flights and accommodation, somehow the extra $100-plus seems a pain.

But while fewer travel policies have been bought in the past 12 months, more consumers are getting knocked back by insurance companies when they claim. The insurance ombudsman says that for the 2005-06 year it has had almost 30 per cent more disputes referred to it than in the previous 12 months - that's after the 44 per cent jump in disagreements going through insurers' internal dispute resolution processes.

For many families, though, a trip overseas would be unthinkable without the cover. And it is expensive, more so than in other countries, says the Australian Consumers Association, which says we pay way over the odds.

HOW YOU CAN SAVE

It's well worth letting your fingers do the walking and comparing prices online, say the ACA and research house Cannex, because there are big savings.

Myriad websites such as www.travelinsurance.com.au offer policy premium comparisons. What are harder to discern, though, are the exact differences between policies, because the last thing you'd want on holiday is to find the bargain policy you bought actually offers less cover. In that case a $30 supposed saving could cost you thousands of dollars.

Cannex analyst Anthony Sexton says you can often find the same policy offered by a travel agent at half the price on the web. Sometimes the discounts are not as dramatic, but still worth considering. For example, MBF travel insurance is 20 per cent cheaper online.

Also, if you're travelling with friends, ask about companion cover - it's often cheaper buying cover together than each paying for single policies.

Online policies mostly fall into three groups, says an industry insider:

? Good comprehensive policies on travel agent or big international airline websites, offered at moderate discounts;

? Policies offered by member organisations that have discounted commissions but are still comprehensive;

? Unknown brands at discounted premiums often because there is less cover and strict policy terms.

To show how much premiums can vary, we looked at the cost of single cover for a 10-day trip to South Africa and found a range from $87 (via the net) to about $140. Even wading through the small print, it was hard to find huge differences other than the obvious ones such as baggage allowances.

WHAT TO WATCH FOR

As with most insurance, the devil's in the detail. Don't be blinded by huge limits, says our expert.

"Probably the biggest factor to consider is the circumstances of when a claim will be accepted," he says.

"As a general rule the limits are more than adequate and are very rarely reached. It is therefore dangerous to accept a policy with a higher limit if it provides more prescriptive circumstances for activation."

So while the limits on one policy may appear to be lower, it may offer extras such as covering for a relative to travel to your bedside if you are seriously injured overseas.

If you're buying cover online, is there 24-hour support at the other end of a phone? For some travellers, paying extra via a travel agent is well worth it because they know they'll have help changing flights or reorganising trips in an emergency.

WHAT'S ON YOUR CARD

If you have a gold credit card, chances are it offers free travel insurance. Make sure, though, it's comprehensive travel insurance rather than travel accident insurance, as the latter covers you only for injuries at the trip's point of departure or arrival.

Also check whether you have to pay for the travel on the card to trigger the cover. For example, the insurance ombudsman cites a claim being refused because the trip deposit was paid in cash. And, says the ACA, some Australians have discovered they had no cover via their gold card because their credit limit wasn't high enough.

WHEN THINGS GO WRONG

The two biggest areas of dispute in travel insurance claims are pre-existing medical conditions and baggage claims, says insurance ombudsman Sam Parrino.

To avoid any claims being thrown back at you, see your doctor before you go to clarify what you've been treated for. Some policies say a pre-existing condition applies to anything in the past 12 months; others the previous five years. If in doubt, tell your insurer everything - that you're on blood pressure tablets, you've had a hernia, etc - to avoid any misunderstandings.

And be vigilant about luggage and your belongings - don't play the innocent abroad. Saying you left your luggage under the restaurant table "for only a minute" while you got your coffee won't cut it with your insurance company.

CASE STUDY

RIDING pillion on a motorbike in Thailand earlier this year, the last thing Tony Kenison (pictured) expected was to end up in hospital with a badly broken leg.

His first sign of impending medical bills was a request from the private hospital that he pay a deposit of $1000. Thanks to his comprehensive travel insurance, this was later refunded, his bills were paid and he was flown home in business class.

"When I arrived at the hospital I phoned a friend in Australia and asked them to contact Ace Assistance," says the property manager. "They made sure I had wheelchair assistance in Bangkok and Melbourne, and called everyday to see if I needed anything."

Kenison had taken extra cover on his American Express gold card as he had been travelling frequently. "Never have I been so grateful to have it," he says. "It's the best customer service I've ever had for anything."

© 2006 Sun Herald

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