Travelling overseas opens doors to new experiences, but risks like lost luggage, missed connections, flight cancellations, or weather-related delays can disrupt plans. Travel insurance provides a safety net, offering financial protection and peace of mind. For Australians, selecting the right policy is crucial, especially when navigating international healthcare systems or complex itineraries. This article guides you through choosing the best travel insurance for overseas travel, highlights key factors to watch for, explains why coverage is essential, and details the top five travel insurance claims in 2025.
Why Travel Insurance Matters for Australians
Travel insurance is a must for Australians travelling abroad due to high costs and frequent disruptions:
- Financial Protection: A hospital stay in the U.S. can exceed AUD 15,000, far beyond Medicare’s limited overseas coverage.
- Trip Disruptions: In 2024, 29.5% of flights at San Francisco International Airport were delayed, and 2.63% at Newark were cancelled, often due to weather or operational issues.
- Lost Luggage: Globally, 0.6% of bags (6 per 1,000) were lost, delayed, or damaged in 2023, per U.S. Department of Transportation data.
- Missed Connections: Over 1,900 U.S. flights were delayed or cancelled in June 2025 due to weather, causing missed connections.
- Peace of Mind: Coverage lets you focus on your trip.
- Emergency Assistance: Policies offer 24/7 support for medical referrals or evacuations, critical far from Australia’s healthcare system.
For Australians, travel insurance is essential for overseas trips.
Top 5 Travel Insurance Claims in 2025
Based on 2025 industry data, the top five claims for Australians are:
- Trip Cancellation or Interruption:
- Why It Happens: Illness, family emergencies, or natural disasters. In 2023, 3.03% of Newark flights were cancelled.
- Coverage: Reimburses non-refundable costs, up to AUD 50,000 in plans like Cover-More’s Comprehensive.
- Claim Frequency: ~20% of claims, per Australian insurer data.
- Medical Emergencies:
- Why It Happens: Illnesses or injuries, like a AUD 9,000 hospital bill in Hawaii.
- Coverage: Covers hospital stays or evacuations, with plans offering AUD 100,000–unlimited coverage.
- Claim Frequency: 82% of Australians buy insurance for medical coverage, per 2025 surveys.
- Lost or Delayed Luggage:
- Why It Happens: 0.6% of bags were lost or delayed globally in 2023, disrupting plans.
- Coverage: Compensates up to AUD 5,000–7,500 in plans from Bupa or Allianz.
- Claim Frequency: Common, with 16% of Australian cruise claims tied to luggage.
- Trip Delays:
- Why It Happens: Weather or mechanical issues delayed 1 in 5 U.S. flights in 2024.
- Coverage: Reimburses expenses, up to AUD 2,000–10,000 in plans like 1Cover.
- Claim Frequency: Frequent due to 1,900 U.S. flight delays in June 2025.
- Missed Connections:
- Why It Happens: Delays cause missed flights or ferries, like a AUD 4,000 Greenland ferry claim.
- Coverage: Covers costs up to AUD 1,000–2,000 in plans like InsureandGo.
- Claim Frequency: Rising with complex itineraries.
How to Pick the Right Travel Insurance
1. Assess Your Travel Needs
Consider:
- Destination: Countries like the U.S. require high medical coverage.
- Duration: Longer trips need comprehensive policies.
- Activities: Adventure sports (e.g., diving in Bali) need extra coverage.
- Health: Pre-existing conditions require waivers, as Medicare offers limited overseas support.
- Trip Cost: Expensive trips need robust cancellation coverage.
2. Understand Coverage Types
Ensure coverage for top claims, with at least AUD 100,000 medical and AUD 250,000 evacuation coverage.
3. Compare Policies
Use Australian sites like Compare the Market or iSelect:
- Coverage Limits: Verify medical and trip cost coverage.
- Premium Costs: Average AUD 150–300 for a two-week trip.
- Deductibles: Lower deductibles reduce out-of-pocket costs.
4. Check Pre-Existing Conditions
Disclose conditions and buy waivers within 14–30 days of booking.
5. Consider Travel Frequency
- Single-Trip Policies: For one-off trips.
- Annual/Multi-Trip Policies: Cost-effective for frequent travellers (trips up to 60 days).
- Specialty Policies: For cruises or adventure travel.
6. Research the Insurer
Choose reputable providers like Cover-More or Allianz, with A ratings and strong reviews (e.g., 4.2/5 on ProductReview.com.au).
Pitfalls to Avoid
- Exclusions: Policies may exclude weather delays, pre-existing conditions, or activities like diving.
- Low Coverage Limits: AUD 10,000 medical coverage is inadequate for the U.S.
- Claim Denials: One in five claims was denied in 2023 due to missing documentation. Keep receipts and airline letters.
- Late Purchase: Buy within 14–21 days for waivers.
- Assuming Other Coverage: Credit card insurance often lacks sufficient limits.
- No CFAR: Cancel for Any Reason offers flexibility but requires early purchase.
- Ignoring Fine Print: Check for restrictive terms.
Tips for Maximizing Your Policy
- Buy Early: Secure waivers and CFAR coverage.
- Document Everything: Keep receipts and incident reports.
- Know the Claims Process: Claims take 4–6 weeks; provide complete documentation.
- Contact the Insurer: Use the 24/7 hotline for emergencies.
- Tailor Coverage: Prioritize medical or luggage coverage.
Why It’s Worth It
Travel insurance costs 4–10% of your trip—AUD 200–500 for a AUD 5,000 trip. Compare this to a AUD 15,000 hospital stay or losses from a cancelled flight. With 1 in 5 flights delayed, 0.6% of bags lost, and frequent medical claims, insurance mitigates risks. In 2020, COVID-related cancellations showed its value.
Conclusion
Travel insurance is vital for Australians travelling overseas, covering risks like cancellations, medical emergencies, lost luggage, delays, and missed connections. Assess your needs, compare policies, and read the fine print. Avoid pitfalls like exclusions or low limits, and document everything for claims. With the right policy, you can travel confidently. Safe travels!
