Concerns over global instability and climate-related disruptions are influencing travel insurance decisions among New Zealanders, according to a recent study by Southern Cross Travel Insurance (SCTI).
The Future of Travel report found that 73% of respondents are more inclined to purchase travel insurance due to geopolitical uncertainties, while 78% now consider it a high priority.
The survey, conducted in November 2024 with 1,002 participants, examined how external risks are shaping travel habits and insurance choices.
SCTI chief executive officer Jo McCauley highlighted the role of emerging conflicts in shifting consumer attitudes toward travel coverage.
“Nearly 80% of the New Zealanders we surveyed indicated that the increase in conflict in many parts of the world has made them feel less secure and more inclined to take out travel insurance. So, we’re keen to ensure travellers are fully aware of how insurance can respond in these situations,” she said.
Travel insurance policies generally exclude coverage for destinations experiencing ongoing armed conflict. SCTI currently lists Israel, Syria, Sudan, Iran, and Iraq as regions where cover is unavailable.
McCauley explained that insurance may not apply if a conflict is well-documented before a traveller purchases a policy or departs. However, if violence occurs unexpectedly while a policyholder is already abroad, coverage could be available in some cases.
Climate change is another factor driving demand for travel insurance, with 74% of survey respondents acknowledging the increasing risk of severe weather events affecting their trips.
SCTI data showed that:
Claims for natural disaster-related incidents varied, with the highest payout for the 2024 Vanuatu earthquake reaching $4,800.
However, the most common insurance claims remain related to medical issues, lost or damaged personal property, and trip interruptions. Between November 2023 and January 2024, SCTI paid out more than $5.6 million in claims, including:
While 78% of respondents prioritise travel insurance for international trips, only 40% consider it important for domestic travel. SCTI noted that some local travel claims can be costly, particularly for cruise trips or outdoor excursions.
One recent domestic claim exceeded $11,000 after a traveller was forced to cancel a non-refundable hiking trip due to COVID-19.
McCauley pointed out that domestic travel claims are more frequent than some travellers might expect.
“We recently looked at the number of claims we received for domestic NZ vs our flagship international comprehensive policy. As a percentage of policies sold, we received more claims for our domestic policies than our international comprehensive policy,” she said.
SCTI data suggests that, on average, domestic claims amount to around 70% of the value of international claims.
The insurer advised travellers to take precautionary measures to protect their belongings and comply with local regulations when renting vehicles or engaging in adventure activities.
Between January and December 2024, SCTI received over 1,600 claims for lost items and more than 1,500 claims for electronic devices. The highest claim payout for lost or damaged electronics was $5,572 for camera equipment.
Other significant claims included:
SCTI also recommended that travellers ensure they have appropriate coverage for activities such as motorbike rentals, skiing, and ocean cruises, as some policies require additional add-ons for these risks.
