Travel Insurance Common Terms Explained

It is often to difficult to blend in as local in foreign climes, making you stand out as a tourist. This can sometimes put you at greater risk of thieves who target tourists. You could fall ill or have an accident on your travels, and won’t necessarily be covered under your usual health insurance. You may also face delays or cancellations which you need to be covered for; otherwise the whole trip you arranged could become an expensive loss. Understanding what is covered on your travel insurance policy is vital in case of the worst case scenario.

When you look to take out travel insurance you need to have some familiarity with some of the insurance terms involved. Don’t be daunted by the insurance language you come across as it often needs translating the first time you run into it. It will go on at length saying the same thing in different ways so that insurance underwriters can earn their wages. 

Your concern should be that the things which are worrying you about your travels are fully covered in the policy you buy. There is no point wondering afterwards how an awkward situation could have benefited by better coverage. If you aren’t sure of something make sure it is explained.

The full details of all insurance cover are outlined in the PDS. This is simply an abbreviation for a product disclosure statement. In simple English this means it tells you what you are insured for. Most of it is pretty standard with a few optional extras.  Those are the things you pay extra premiums for out of choice, such as extra cover for dangerous sporting activities. Obviously if you are a 70 year old couple planning to relax and visit museums you shouldn’t be persuaded to pay extra for snow boarding cover.

Look out for exclusions: these are the things which are not covered by your policy, such as war. If war breaks out the State department probably advised you in advance not to travel to the area, and if you did not follow this advice you’ll find yourself without coverage.

An Excess is the amount which you will need to pay, or not have paid by the insurance company, for some part of your claim. For an example if your handbag and its contents are stolen you will only receive the amount of your claim back minus the excluded amount, a figure such as $50. Obviously if you were robbed of a tatty old bag with a $10 bill inside and nothing of value, you wouldn’t waste your time claiming for this.

If however, your bag was an expensive one with valuable personal possessions inside you would make a claim on the insurance policy, but would have to prove ownership of the things you claimed for by producing receipts. The maximum amount you are likely to receive from the insurance will be outlined in the policy.

Insurance to cover lost baggage is already covered by the airline, but may well not be enough to cover the cost of personal items which go astray between one airport and another. A specific travel insurance policy will have more built in cover. If you are travelling light you won’t need it.

Medical Emergencies covers just that, but don’t start running up bills for this until you or your representative have checked that the insurance company are willing to pay. It is worth paying the extra premium to cover medical repatriation insurance which offers a better service in the event of illness or accidents, and can organize your return to a hospital near your own home. In the worst case scenario repatriation cover funds the return a body home for burial, an immense cost if you had to bear it yourself.

Also look out in the common wording of the policy for things like trip limits, which may refer to the number of day’s coverage you have at any given time. Also check for pre-existing medical condition clauses, not covered by the insurance. Check for age limits as travel insurance tends to discriminate against age, as there is more risk with an elderly person traveling.

When signing and paying for your travel insurance, just take extra care to know exactly what you are covered for. The exclusions will show what is not covered, so you have the choice of adding these exclusions to the policy, for another premium. Make sure at the end of the day that the cover is right for you and your needs, and don’t find yourself paying extra for Granddad to ski down dangerous mountains.