Finding The Cheapest Travel Insurance

Travel insurance is essential if you're going on a long trip, but if you don't do your research you can pay over the odds. An analysis by comparison site Mozo highlights the potential for overspending: depending on who you purchase from, you could pay $177 or $756 for essentially identical cover.

Picture by Joe Shlabotnik

The Mozo team performed a mystery shopping exercise for policies for three different scenarios, covering web sites for major travel agents and airlines and also incorporating its own travel insurance comparison site. The results are telling:

A major factor in the price difference is the commission paid (the Qantas fare quoted includes a 53 per cent commission, though you have to dig into the details to find that). While another popular option is to use the free travel insurance you get if you book with specific credit cards, that won't always cover all your needs. In particular, it won't generally cover items lost while you're travelling.

Check out the infographic below for some more insights into travel insurance, and share your approach in the comments.

Mozo


Comments

    Ask people in south east Queensland after last year's floods if choosing insurance based on the price, rather than what is actually covered is a good idea.

    If possible use an insurance broker. We got caught up in ash cloud/broken ferry/various chaos in NZ. Our insurance was through our insurance broker. It was reasonably price - not the cheapest, but not mega expensive.We made a claim and they paid most of it, but didn't pay about $500. I was going to let it go but the broker kept at them and three months later we got the final $500.The broker said the insurance companies rely on people not bothering to fight with them so automatically refuse anything the think they can get away with. Our broker said he was too bloody stubborn to let them get away with it.

    If you have a couple of kinds of insurance (house, car, income...) it's probably worth talking to a broker. Most can consolidate your policies, and will usually help facilitate claims. Ours smoothed the way when claiming on our business insurance for storm damage. I gave him details of the damage, he did all the paperwork, cheque appeared. Yay!

    I've got a zero annual fee gold credit card (Commbank Low Fee Gold, I spend enough that they drop the fee, thou there are other providers who offer gold cards with no fee). Includes travel insurance for travel booked on the card. Booked tickets for Hawaii just recently including some accommodation for $1800, the extra credit card fee was just under 2%, so I paid an extra $30ish, but it will cover me for flight delays etc.

    It's probably a pretty basic level of travel insurance, but having skimmed the PDS, it does seem to cover flight delays, alternate transport costs, medical costs.

    Not sure how this option stacks up?

      This is a little off topic, but I thought I should add, that I keep a few Credit Cards around for various bonuses they offer.

      CommBank Low Fee Gold Card (Zero fees with the amount I spend), for the purpose of insurance etc. This is my general everyday card, as it's linked to my main account, and CommBank have got good online tools which let you see what you spend, basically as soon as you swipe your card.

      28 Degrees Card (also Zero fee), this I use for online purchases, as it's one of the only cards which doesn't charge a ~2% transaction fee, adds up to some fairly significant savings. Another tip with this is if you purchase overseas using PayPal, pay using the foreign currency, as PayPal gives rubbish exchange rates, often 3-4% off the spot rate, whereas the Mastercard exchange rate is usually <1% off.

      I also use this card to Cash Advance myself money when I travel overseas. 28 Deg don't charge a transaction fee for this (the main reason I do this), however be aware that Cash Advances are charged interest as soon as they are withdrawn, so either I usually deposit money onto the card in advance to counter this. I do this as it means I don't have to carry around a large chunk of foreign currency so it doesn't get lost and I don't end up with a big chunk left over that I have to change back. Also the exchange rate is quite good (Travelex exchange rates are usually 3%+ worse then the spot rate) and doesn't attract a commission like Travelex.

      I think most of the large banks will also exchange money for you before you travel at a much cheaper rate then Travelex, not sure how this stacks against the 28 Deg card thou, but I prefer not to carry large amounts of cash regardless.

        Another benefit of the 28 Deg card, is that you can get Purchase Price insurance. This basically means that if you buy something, and the price drops in the 6 months after you purchase it, then 28 Deg will give you back the difference minus a small fee.

        This costs 0.5% of your end of month statement. But if you continually put money onto the card as you spend it, it will cost you . Even if you don't, depending on how you use it, it could put you well ahead. Great for gadgets and tech that tend to drop in price rapidly after purchase and it means you don't get slugged as bad as an early adopter. Phones and Flatscreen TVs are great for taking advantage of this.

          *it will cost you nothing.

      Forgot to say, Bankwest now have a Zero Fee Platinum card that I'm considering switching too, has additional benefits such as a concierge etc.

        Hey Ben,

        I recently looked at the 28degrees card and the Bankwest version. If you intend to use the Bankwest one for foreign transaction, just keep in mind that although their sales pitch says it is fee free, the fee's are hidden inside of the currency conversion (which is 3% to 15% more expensive than the 28 degrees card).

        https://www.thriftydevil.com.au/news/which-credit-card-for-foreign-transactions

    so what brokers are good to use?

    Travel insurance is essential if you are leaving the country full-stop. Whether its a long-trip doesn't make any difference. It only takes seconds to be involved in a car accident, be otherwise injured etc. Not to mention flight delays, stolen goods...

    I think saving on travel insurance where possible is excellent, but even expensive travel insurance pales in comparison to the cost of being in hospital overseas.

    I buy travel insurance for places like the US with no public healthcare.

    Otherwise I take my chances.

      Then I can only hope that I never read about Fryiee in the newspaper who got hurt somewhere overseas or into some strife and goes running to the nearest Australian Consulate expecting them to fix everything and make them better and fly them home... at taxpayer expense...

      Seriously... if you can afford to travel overseas... you can afford Travel Insurance. It's THAT simple.

      Mmm. Except that with very few exceptions (UK and NZ being the obvious ones), as an Australian you won't be able to access public healthcare. You'll have to pay full price.

      And you'd want to hope you don't need medical assistance to get back to Australia. Even something as simple as being accompanied by a nurse on a commercial passenger flight will cost tens of thousands of dollars.

    I don't travel often OS, maybe 1-2 times a year, but I always have full coverage travel insurance.. always. It's not that expensive. Thankfully I've never had any bad things happen to me but I'm not sure about the rest of you... I can't afford a $30-50K hospital and medical bill if I was unlucky enough to get seriously hurt OS, or even something as simple as having my stuff stolen...

    One tip I would offer, especially when shopping online (and why would you bother paying commision to Travel Agent IMO when they are just purchasing the same exact cover you can get direct), one tip is to not get swayed by reviews from travellers who post "I use ABC123 for my trip to Europe and they were great. I didn't have to make a claim.. but ABC123 were GREAT!" that kind of review is virtually useless. OF course they were great... you gave them money.. they did nothing, nothing happened to you. Everyone wins. The ones to read and get a feel for are the reviews where people had to make a claim. Even then you need the usual "interweb" filter to weed out the serial complainers.

    I have used TID last few times without incident. Of course, no claims so far (fingers crossed) but they are affordable. Covermore is another online provider. I've nt used them but my friend had a claim and they were very good.

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