Canstar's 2023 Travel Insurance Star Ratings research has revealed that the cost of travel insurance is on the rise. The average increase is by $38 or 11%, from $337 per policy in 2022 to $375 in 2023.
Particularly affected are Aussie families and seniors, facing a substantial average hike of nearly $50 compared to the previous year.
Canstar travel insurance expert Steve Mickenbecker (pictured above), noted that the cost of overseas travel insurance increased for the second year running due to the impact of the challenging COVID-19 landscape in 2022. This prompted insurers to provide coverage at a higher cost to mitigate increased risks.
“The 11% premium increase in 2023 reflects the elevated expenses associated with settling claims in an inflationary environment,” he said.
Mickenbecker advised travellers seeking to balance affordability with quality coverage to compare insurance prices.
“When planning for a holiday, travellers always want to find the best deals when it comes to flights and hotels, and your insurance shouldn't be any different,” he said. “The price of insurance varies widely, even when comparing like-for-like protection.”
Mickenbecker said travellers who do not compare policies are likely paying “way too much” for their coverage.
Mickenbecker cautioned against overlooking policy details. He emphasised the importance of understanding the events triggering a claim, financial damages covered, and exclusions outlined in the policy. He also stressed the significance of disclosing pre-existing health issues to the insurer and thoroughly reviewing policy terms before embarking on high-risk activities.
“Travellers should read the policy when they are taking it out, and not wait until they are making a claim,” he said. “No insurance comes without limitations and only finding out what these are when a claim is declined can be devastating.”
The ongoing impact of COVID-19 on travel insurance policies is also under scrutiny. Canstar introduced COVID-19 considerations in 2022, requiring 5-Star Rated policies to allow COVID-19 claims. However, the broader market review indicated that 22% of providers out of the 54 reviewed do not offer cover for COVID-19.
Mickenbecker advised potential travelers to carefully assess COVID-19 coverage, considering that premiums are, on average, 40% higher for policies offering comprehensive protection against it.
“Some insurers only provide COVID protection for medical treatment overseas only, while others also cover cancellation and interruption of travel,” he said. “On average, premiums are only nominally higher to the more complete cover, so it is worth comparing.”
In other news, a recently conducted survey by Quantum Market Research on behalf of the Insurance Council of Australia (ICA) and the Department of Foreign Affairs and Trade’s Smartraveller noted a concerning phenomenon of Australians engaging in uninsured travel.
