What you need to know about travel insurance

Travel insurance can protect Kiwis flying overseas.
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Travel insurance can protect Kiwis flying overseas.

An online travel insurance company has taken out this year's national award for best-value policy, sharing the top spot with Southern Cross.

Travel Insurance Direct were joint winners with Southern Cross in this year's Canstar travel insurance awards, offering the best policies across both trans-Tasman and international travel.

Research agency Canstar compared 54 travel insurance policies from 32 companies, investigating the best policies for singles, couples and families travelling to different regions.

Judges said Southern Cross had the most competitive premiums, with other features like unlimited overseas medical expenses, up to $50,000 for cancellation and loss of deposit, $25,000 for luggage and personal effects, and the ability to claim online putting them ahead of the rest.

Travel Insurance Direct offered premiums "within a whisker" of Southern Cross, and offered similar features, along with some extras - unlike many other insurers, diabetes cover was standard alongside cover for pregnancy up to 26 weeks. TID would also pay up to $500 for pet boarding costs if owners were away longer than anticipated, and would accept reverse charge calls to their helpline.

New Zealanders took 2.28 million overseas trips last year, an increase of 4 per cent on 2013. More than half of these were to Australia, followed by the United States, Fiji, Britain, the Cook Islands and China.

Canstar found a week-long trip to Aussie came at an average cost of $104 for a family, with $66 the lowest and $228 the highest price. Family prices were often great value, Canstar New Zealand general manager Derek Bonnar said. "Large families get perhaps the best value for money of all, with family policies being only a fraction more expensive than the cost for child-free couples."

The average cost of insurance for a couple going on a 10-day trip to the States was $246, for the UK $187, for Thailand $180 and for China $188.

Researchers warned it was a fallacy to think money would be saved if travel insurance was booked at the last minute. Booking early meant you would be covered for cancellations, and also if anything happened to you in the lead-up to the trip that meant you couldn't make it.

"Getting in early makes sense. For instance, if you booked a trip for three months' time but had the misfortune to break your leg in the meantime and were unable to travel, your travel insurance policy would refund prepaid airfares and any tour deposits you may have made," Bonnar said.

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"Offshore events such as Tropical Cyclone Pam or domestic events such as a family member suddenly falling sick can cancel a holiday altogether. That said, it's never too late to insure yourself, so if you're heading away for Easter next week and haven't yet put travel insurance in place, do it right now."

Further details on the ratings of other insurers can be found at canstar.co.nz.

TRAPS TO WATCH OUT FOR

Travel insurance was second in New Zealanders' list of gripes to the Financial Services Ombudsman last year, behind personal loans for car purchases. Here's what you can do to minimise any problems.

* Pre-existing conditions: these are existing medical conditions that insurers don't cover. Each insurer will have a different list, so make sure to read the small print. Don't be tempted not to declare your condition, as it could void the entire policy.

* Look closely at policy definitions to check cover is as comprehensive as thought.

* Age limits - cover can be limited when a trip is cut short by the death or illness of a relative over a certain age (usually 75-80).

* Cover for certain sports - Skiing, snowboarding, scuba-diving, bungy-jumping and motorcycling may not be covered unless discussed with your insurer beforehand.

* Motor vehicle liability - Most insurers don't cover the renting of a car in another country, so make sure you take out a comprehensive policy from the rental agency.

CASE STUDY 1

C arranged insurance for a trip to Peru between June and September 2013, with P. In June, C made a claim, providing a report from the Peruvian police, which stated C "declares having forgotten and left, inside a black coloured taxi . . . a black coloured HP personal computer". P declined the claim on the basis that the loss was not a result of a defined peril, in this case theft, and the claim was outside the scope of cover.

C disputed the decision, saying the police report did not correctly record the circumstances. C stated that she did not leave the laptop in the taxi, but that it was stolen. The case manager did not believe C had shown, on the balance of probabilities, that the laptop was stolen. The complaint was not upheld by the Insurance and Savings Ombudsman.

CASE STUDY 2

X arranged travel insurance for his and his wife's travel to Australia between June and August 2013, with P. While in Australia, X's wife sought medical treatment for a problem with her left eye.

X telephoned P and advised that his wife required eye surgery. P told X it did not believe the surgery was emergency surgery, given that it was scheduled two weeks later. P said it was considering flying X's wife back to New Zealand for treatment, and requested confirmation from X's wife's doctor in Australia, who said this was fine.

P said X's wife was fit to fly back to New Zealand and the policy would not cover claims arising from her refusal to return to New Zealand.

X told P his wife would undergo surgery in Australia, and then tried to claim for the surgery when the pair returned to New Zealand. P declined the claim, saying X's wife had been fit to fly, the surgery was not emergency treatment and the policy did not cover private hospital treatment where publicly funded services were available. The claim was not upheld by the ombudsman.

 - Sunday Star Times

Related Links

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