Travel insurance: Why it's a must

Preparing for a holiday is usually when you start pinching pennies. As your departure date looms, you might be tempted to slash items from your ‘must-get’ list. Sometimes this will be a good call. Do you really need a $500 raincoat in the tropics? Or three brand new bathing suits? Other times, cutting corners will be a decidedly bad call. Case in point: travel insurance.

Travelling without insurance is a huge risk. Costs for cancellations, theft, accidents, injuries and illnesses can run into the tens of thousands of dollars. Travelling without adequate insurance is also a risk. When shopping around for different policies, be sure to take a magnifying glass to the small print.

Pre-existing conditions

Most travel insurance policies exclude pre-existing injury or illness. Broadly speaking, this means ‘an injury or illness for which you have received medical treatment or have taken medication in a specified period of time before the policy starts’. Warning: the definition of ‘pre-existing’ can differ between policies, as can the ‘period of time’; for some policies this means 21 days, for others six to 12 months.

In short: be sure to carefully check all definitions before signing on the dotted line and discuss your concerns with the insurer. Some policies will be able to cover certain pre-existing conditions, like diabetes, epilepsy and asthma. In these circumstances, the insurer might request information from your doctor to ensure the medical condition is well controlled. Other insurers might be willing to extend their cover for a higher premium.

Also be aware that many policies have a general exclusion for serious pre-existing conditions, like mental illness. However, a recent case — Ingram v QBE — has challenged this alleged discrimination.

Ingram v QBE Insurance

Student Ella Ingram was forced to pull out of a university trip when she experienced depression for the first time. When QBE denied her travel insurance claim on the basis of its mental health general exclusion, she challenged them in the Victorian Civil and Administrative Tribunal (VCAT) — and won.

QBE argued that the exception under the Equal Opportunity Act (that is, lawful discrimination) applied because it was supported by actuarial statistical data. However, when the company was unable to produce evidence of this data, VCAT ruled in favour of Ms Ingram.

Had Ms Ingram not taken out travel insurance, she would not have been able to make a claim in the first place, let alone challenge the decision at VCAT where she was awarded remuneration to cover her lost travel costs as well as compensation.

Other exclusions

Some travel insurance policies exclude certain ‘high-risk’ activities, such as extreme sports, and/or activities in particular countries. For example, in Thailand or Indonesia your policy might not cover injuries caused by riding a motorbike.

Think about what type of activities you intend to participate in, and where, and check the small print for exclusions. You might need to pay a higher premium to cover that part of your trip.

Challenges and reviews

If your insurer denies your claim, you have the right to challenge their decision and ask for a review. The travel insurance industry is covered by the General Insurance Code of Practice, which gives access to a reasonably user-friendly review process.

If you do have cause to mount a challenge, it’s a good idea to seek independent legal advice, even if just for general guidance on how to manage the process.

Cautionary tales

The Australian Government's Smartraveller website has many cautionary tales about travellers with no insurance, inadequate insurance or who had insurance claims denied because they disregarded their policy’s terms and conditions, for example, drinking alcohol while under the legal age in their holiday destination.

Maurice Blackburn once acted for a client who suffered a collapsed lung while flying domestically in the USA. After hospital admission and surgery, the medical bill came to more than US$50,000. Fortunately, our client had travel insurance. When their insurer argued that a pre-existing condition had culminated in the collapsed lung, we were able to produce medical evidence to the contrary. As a result, the insurer paid the claim in full. Had our client not taken out travel insurance, the financial implications would have been dire.

Checklist

Follow these steps to make sure you’re adequately covered and to avoid nasty travel surprises:

  • do your research and shop around
  • visit Choice to compare different policies
  • read the small print with a careful eye on definitions, exclusions and all terms and conditions
  • ask the insurer for clarification
  • ask about higher premium options to get the cover you need.

A holiday should be the time of your life, not the cause of crippling financial loss. Skimping on travel insurance can result in significant costs that can run into the tens of thousands, or more. Protect yourself and your family. Spend a little now — and save a lot later.

Kim Shaw is a principal in Maurice Blackburn's Melbourne office.

TOPIC: Insurance
RELATED LEGAL SERVICES: Insurance claims

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Kim Shaw

Maurice Blackburn Melbourne
Kim Shaw is an accredited personal injury specialist practising in superannuation and insurance claims in Maurice Blackburn’s Melbourne office. Kim has been with Maurice Blackburn since 1991 when she finished her articles, and she is very proud of her long association with the firm and their commitment to fighting for fair. Kim established Maurice Blackburn’s Ringwood office, and became a Principal in 1999. With over 20 years of experience representing people with WorkCover claims, Kim now focuses solely on superannuation and insurance claims. Because many people with super claims also have WorkCover claims, Kim’s wealth of knowledge means she can provide comprehensive and practical legal advice for her clients. Kim has represented clients in a wide range of superannuation and insurance matters, including: non-disclosure claims litigating TPD benefits ranging from $25,000 to over $1million advising in matters where there is no insurance due to a failure by employers to pay compulsory superannuation, and recovery of income protection benefits and death benefits. Kim has also provided advice to clients in general insurance matters including in flood and mould matters. She is determined to fight hard for her clients against unfair and unreasonable decisions made by insurers and super funds, and understands the significant financial pressure and strain brought about by an injury, unexpected illness or disability.  “I am passionate about helping people know their rights and ensure they are receiving their lawful entitlements at a time of significant disruption and anxiety in their lives," says Kim. Workplace injuries don’t only create problems with work and job security; they affect families and relationships and create financial pressure. Kim understands that, and finds being able to help with financial compensation incredibly satisfying. “Naturally, a fantastic outcome on a difficult case or a settlement however small or large for a struggling client is terrific. I recall one client saying ‘now we won’t lose our family home’ and I was blessed to be able to play a part in that for her.” Kim is a Victorian co-convenor of Maurice Blackburn’s Women’s Network, where she actively supports women’s rights. As a busy lawyer and mother of three boys, Kim hopes she can be an inspiration to other women. Alongside her work as a lawyer, Kim is the former author of the WorkCover chapter in the Legal Practice Manual published by Monash University Law Faculty. She is a current member of the Juris Doctor Advisory Board/RMIT, is current Chair of the Personal Injury Advisory Committee at the Law Institute of Victoria, and she is committed to continually educating herself and other lawyers, especially the next generation of practitioners. She believes that the best possible advice and advocacy should be provided, and to be able to do that, skills and knowledge must be current, practical and relevant. “I very much enjoy mentoring younger lawyers and love to see their skills develop. Playing a small part in that is a privilege I am grateful to share.” Memberships & accreditations Law Institute of Victoria’s Personal Injury Law Advisory Committee Member Australian Litigation Lawyers Alliance member RMIT Graduate School of Business and Law Juris Doctor Advisory Board member Maurice Blackburn's Women's Network co-convenor ...

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