The experts are often quoted as saying, “if you can’t afford travel insurance, you can’t afford to travel”. But what if you can’t get travel insurance — do you just take the risk? We look at the issues and the options.

A lot can go wrong when you travel: some things can be annoying — like items pilfered from your bag, some can be wildly disruptive — like a lost passport, and some can be catastrophic — like a major medical event that puts you in hospital.

When you’re young, the medical part of travel insurance is most likely to come into play in the event of an accident, but the most likely claim is for something lost or stolen.

However, when you are older, you need to be covered in case you have a significant medical event overseas. Insurance companies will tell you of paying out half a million dollars for clients hospitalised in North America — I have friends who had to re-mortgage their home after one of them ended up in a US hospital for a week without insurance.

Age limits
Some travel insurance companies simply opt out of covering older Australians. The cut-off age may be 59, 74, or any age between 30 and 100. You need to do a lot of homework to pick the right travel insurance policy, so select one that you can continue to renew for a few years.

Credit card, annual or single-trip?
As is often the case, the best place to get independent advice on travel insurance is Choice. The consumer advocacy group has examined the most common pitfalls of travel insurance and analysed specific policies in all categories. It also rates how good each company is with claims and how suitable their policy is for seniors, but its coverage is not comprehensive.

The time to take out a travel insurance policy is either before you book a trip, or at the time of booking. That way, you’ll be covered if you break a leg walking out of the travel agency and can’t take your holiday. However, the insurance policies offered by travel agents are unlikely to be the cheapest or the best — and while you have your head full of transfer times in Singapore, it may not be the best time to study the fine print of an insurance policy.

An alternative is to take out and rely on the travel insurance policy that may be attached to your credit card. Choice found many of these could be recommended, but remember to check if you have to pay for all of your travel or just your airfares to receive this coverage — and whether your spouse and dependants are covered, too.

Annual policy
If you travel a few times a year, including within Australia, it’s a good idea to consider taking out an annual policy. You can do that as an individual, a couple, or a family (generally including dependants up to 25 years of age). Once you have the policy, there’s one less thing to worry about when planning each holiday.

However, there are a couple of things to consider — besides the issues that apply for every policy. First, annual policies may have a lower age cut-off than one-off policies, so check when making your shortlist. Second, there’s likely to be a maximum number of days of coverage for each overseas holiday — typically between 30 and 60 days.

Medical and evacuation
Ensure that the policy covers unlimited costs for medical expenses and evacuation. You simply don’t know how much it may cost to keep you alive. A doctor friend once had to call on an executive jet to lift a patient out of the Himalayas, and I’ve had to sign a form on a beach in Antarctica saying I’ll pay the $US 45,000 for the medical evacuation flight if the insurance company didn’t (fortunately, it did).

Pre-existing conditions
Dreaded pre-existing conditions. Have you got high cholesterol, a lung complaint, arteries that are obstructed (even to a minor extent), or other ailments that may come with age? If so, expect that many insurance companies simply won’t cover you and those that do will charge a significantly higher premium.

One option is to roll the dice and accept that you won’t be covered if you have a medical event overseas related to that condition. But what’s the point of buying travel insurance if it doesn’t cover the most likely event?

The terms of the policies are really conservative, too. If a doctor has ever diagnosed you with high cholesterol (that’s over 5.5 mmol/L), then that’s what you have. It would be foolish to not ask your doctor how healthy your heart is but once you get the answer, you have to report it to your insurance company. Indeed, if you find out anything adverse even halfway through an annual policy, the insurance company may require you to report it.

If you do have to seek travel insurance when you have a pre-existing condition, you are likely to encounter one of three scenarios. The most desirable is that it’s a pre-existing condition that the insurance company automatically accepts. However, you may have to fill out a questionnaire that the insurance company will judge you on, or you may be required to undertake a medical examination.

If you have a medical condition that’s likely to concern an insurance company, you may want to start thinking about what travel insurance you need well before booking your trip.

Reciprocal healthcare
Australia has an agreement with the following countries to provide subsidised treatment for essential services to anyone with Medicare: Belgium, Finland, Italy, Malta, Netherlands, NZ, Norway, Ireland, Slovenia, Sweden, and the UK.

You may think you don’t need travel insurance if you’re only visiting those countries, but that is not the case. The agreement doesn’t cover you if your luggage is stolen or if you get sick in transit, nor does it cover an expensive repatriation flight to get you back to a hospital in Australia.

Parents at home
Many of us have aging parents. Check the conditions of your policy to ensure you’re covered if there’s a medical emergency at home that you need to rush back to.

Rental car excess
If you rent a vehicle overseas, it’s likely you’ll be asked to pay a high daily fee to reduce the excess on the vehicle’s insurance. So, you may get the car for $40 per day and then pay $35 per day to cover the excess. One way around this is to rent the car through an Australian company like Driveaway Holidays, who has a more reasonable excess of $10 per day. Or you may find that your travel insurance covers the excess (most do) and you can pay a little more to cover an even more exorbitant excess fee.

A note of caution is necessary here. In Canada, I’ve been told by one of the major rental car companies that they provide absolutely no insurance on the vehicle — so if you don’t pay their ridiculous rate, the car has no insurance.

Activities and the rest
If you are going to be doing any activities on your holiday, check they are covered. This is particularly true for motorcycling, climbing, or scuba diving. And if you’ll be engaged in any snow sports, expect to pay an additional premium.

There are a lot of other events that may be covered by your travel insurance that may turn out to be useful. However, if you are covered for medical, disruptions, and baggage, you can travel with some sense of security. See you at the airport.

What’s your experience with travel insurance? Or have you ever needed it and not had it?

Read more: