We never travel overseas without travel insurance. Within Australia, we usually don’t buy it. There are good reasons for both, and they’re what this guide is about.
We’ve only ever made one claim, but it shows exactly what travel insurance is for. Darren’s suitcase didn’t arrive when we flew into Rome for a three-day family wedding, and it had his suit, my dress and almost everything we’d packed for the wedding events in it.
Here’s what travel insurance is, what it covers, what it doesn’t, and how to decide whether you need it for your trip. We’ve used Australia for the examples (Medicare, Smartraveller and the Australian banks), so if you live somewhere else, check how your own country’s health system and services work when you’re overseas.
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In this guide
At a Glance
Travelling overseas
Always get it
Travelling at home
It depends
When to buy
As soon as you start booking
Before you buy
Read the PDS
What is travel insurance?
Travel insurance is a policy that pays for certain things going wrong before or during a trip, up to set limits. You pay for it up front. If something the policy covers happens, you make a claim, and the insurer pays the cost less your excess.
A few terms come up in every policy, and they’re worth knowing before you start comparing:
- Premium: what you pay for the policy.
- Excess: the amount you pay towards a claim before the insurer pays the rest.
- Limits: the most the insurer will pay for each type of claim and often for each item.
- Exclusions: the situations the policy doesn’t cover.
- PDS (Product Disclosure Statement): the document that sets out what’s covered, what isn’t and how to claim. The PDS is the final word, not the insurer’s marketing.
- Single trip or annual multi-trip: a policy for one trip, or one policy for all your trips over 12 months.
Policies also come in levels. Basic cover (sometimes sold as medical only) is the cheapest. It still covers medical emergencies, but it usually doesn’t cover your belongings or cancellation costs, or it covers them with much lower limits and a higher excess. Comprehensive policies cover a lot more. We buy Cover-More’s Comprehensive+ and add extra cover for certain items when we need it.
What does travel insurance cover?
Every policy is different, but most comprehensive policies cover the same main things:
- Overseas medical and hospital costs, including medical evacuation, which means getting you to a hospital that can treat you or to your home country (for us, that’s Australia). This is the big one.
- Cancellation and changes: the money you lose if you have to cancel or change your trip for a reason the policy covers, such as becoming ill before you go.
- Delays and missed connections: extra costs when something the policy covers holds you up or makes you miss a flight. Whether a missed flight is covered depends on why you missed it.
- Luggage and travel documents: belongings that are lost, stolen or damaged, and an allowance to buy essentials if your bags are delayed.
- Rental vehicle excess: the excess you’d otherwise pay the hire company if your hire car is damaged or stolen. (There’s more on this in our guide to hiring a car overseas.)
- Personal liability: if you accidentally injure someone or damage their property.
How much each part pays, and the conditions attached, vary between policies, which is why the PDS matters.
Lisa’s Tip
We always make sure our camera and tech gear is covered: cameras, action cameras, the drone, laptops and phones. Policies have a limit for each item, so we check those limits against what we’re carrying and pay for extra cover where we need it. That way we have a set limit for each piece that we know about and are happy with.
When we needed it: Darren’s suitcase and a three-day wedding
Darren, my mother-in-law Maureen and I flew to Rome for a family wedding. It was a destination wedding spread over three days, with something on each day leading up to the ceremony, so we’d packed smart-casual and cocktail outfits as well as our wedding clothes.
My suitcase arrived. Maureen’s arrived. Darren’s didn’t.
Darren’s case had his suit, my dress for the wedding and our clothes for the two days of events beforehand. My case had the shoes for both of us. So we had plenty of shoes and nothing to wear with them.
Before we left the airport, we lodged a lost baggage report with the airline and kept the lost luggage receipt they gave us. Then we contacted Cover-More, who told us to go shopping and buy what we needed. That meant three outfits each, and I got to go clothes shopping in Italy, which was really nice.
We kept every receipt. Back in Australia, we lodged our claim with the receipts, the airline’s lost luggage receipt and a copy of the wedding invitation, which showed it was a three-day event and why we needed all those clothes. Cover-More paid it without any questions.
Darren’s suitcase did turn up in the end: on the night of the wedding, at the accommodation where we were staying and where the reception was being held. By then, we were already at the reception.
Darren in his new Italian suit, and Maureen and me at the wedding
Lisa’s Tip
If your bag doesn’t arrive, report it to the airline before you leave the airport and keep the paperwork they give you. Keep every receipt for what you buy, and keep proof of why you needed it. For us, the wedding invitation did that job, and it made our claim simple.
Lisa’s Tip
We now put Apple AirTags in our luggage. They weren’t around when we lost our luggage in Rome, but when Darren’s suitcase didn’t turn up after a domestic flight from Melbourne to Brisbane, I shared the AirTag’s location with the airline. They found it quickly and delivered it to our house.
What travel insurance doesn’t cover
This is where people get caught out. Exclusions vary between insurers and policies, but these come up again and again:
- Pre-existing medical conditions you didn’t declare. You need to tell your insurer about your health conditions when you buy. Some are covered automatically, some for an extra cost and some not at all.
- Alcohol and drugs. Smartraveller, the Australian Government’s travel advice website, warns that even a low blood alcohol level can get a claim denied.
- Breaking the law, such as riding a moped without a helmet, or without the licence your policy requires.
- Activities the policy excludes. Insurers exclude a lot, even common things like cruises and skiing, and activities such as scuba diving, hiking and motorbike riding often need extra cover.
- Belongings left unattended in a public place.
- “Do not travel” destinations. If Smartraveller’s advice for where you’re going is “Do not travel”, you usually won’t be covered.
- Things you already knew about when you bought the policy.
- Changing your mind. Standard cancellation cover doesn’t pay out because you’ve decided not to go. Some insurers sell an add-on that does, with conditions.
- An airline, tour operator or travel agent going broke. This is a common exclusion, although some comprehensive policies include limited cover. Check yours.
Before our Komodo liveaboard, we checked that we were covered for diving. Activity rules can be surprisingly specific: Smartraveller gives the example of walking in the mountains above a certain altitude being treated as mountain climbing. If you’re planning to do something, check it’s covered before you go.
How you book can matter as much as your insurance. We’d booked a trip to Vanuatu when Air Vanuatu went into voluntary liquidation. Because we’d booked our flights through Qantas (it was a Qantas codeshare with Air Vanuatu), we got a full refund, and we were able to cancel our accommodation without any penalty. Then we cancelled our travel insurance as well.
Lisa’s Tip
When Air Vanuatu collapsed, our refund came from Qantas, because that’s who we’d booked through. We always book directly with the airlines, so if a flight is cancelled or delayed, we deal with them directly.
Lisa’s Tip
It’s the accountant in me coming out, but I always check the PDS. It can be really boring reading, but you need to understand what you’re covered for and what the exclusions are. The fine print is important.
Do you really need travel insurance?
Travelling overseas
For overseas travel, yes. Smartraveller puts it plainly: the right insurance is as essential as a passport for travel overseas.
For us, Medicare, Australia’s public health insurance scheme, won’t cover us once we leave Australia. In Services Australia’s words, if you’re in another country and you need medical care, Medicare won’t cover you. Australian private health insurance generally doesn’t cover treatment overseas either, so check with your fund rather than assuming it does.
That matters. Smartraveller says medical care is usually the highest unexpected cost for Australians overseas, and most countries won’t give you free or subsidised care. Some hospitals won’t treat you until you pay or hand over your insurance details. If you can’t pay, you could be arrested, stopped from leaving the country or sued, and, for Australians, the Australian Government can’t pay your bills. Medical evacuations alone often cost thousands of dollars.
It doesn’t take an adventure to need medical help, either. In Gyeongju, in South Korea, I had a disagreement with a jacuzzi: I was getting out, and it didn’t want me to get out. I ended up with a lot of bruising, but I didn’t need medical treatment. If I had, something as simple as slipping while getting out of a jacuzzi could have meant an overseas medical bill.
Australia does have reciprocal health care agreements with 11 countries, and Italy is one of them. They help, but they’re limited, and they’re not a substitute for travel insurance. (They also wouldn’t have done a thing for Darren’s missing suitcase.)
Good to Know
Australia has reciprocal health care agreements with Belgium, Finland, Ireland, Italy, Malta, the Netherlands, New Zealand, Norway, Slovenia, Sweden and the United Kingdom. They usually cover urgent care that can’t wait until you get home, often with a co-payment. They don’t cover private treatment, non-urgent care or medical evacuation. Take your Medicare card and passport if you need to use one. If you live elsewhere, check whether your country has similar arrangements.
Some trips need insurance before you can go. For example, Cuba requires visitors to have medical insurance to enter. When we did the Inca Trail, we had to show proof of travel insurance, because of the cost of being evacuated if something went wrong.
What about credit card travel insurance? We’ve never relied on it. Some credit cards still include travel insurance, but you usually have to activate it, often by paying for part of your trip with the card, and it often covers less than a comprehensive policy. In Australia, the big banks have been cutting it back, removing it from some cards altogether. Wherever you live, if you’re planning to rely on your card’s insurance, read its policy and check it covers you for this trip.
If you don’t live in Australia, check what, if anything, your own health system covers when you’re overseas before you decide.
Travelling within your own country
Within Australia, we usually don’t buy travel insurance. Here’s why:
- Medical: Medicare and our private health insurance cover us at home.
- Flights: we book directly with the airlines, so cancellations and delays are sorted out with them.
- Belongings: our home contents insurance includes portable contents cover, which covers things like jewellery and some of our camera gear anywhere in Australia.
- Hire cars: we usually pay for excess reduction through the hire company.
That works for us, but check your own situation before you skip it. Portable contents cover is an optional extra, so your home policy may not include it. Medicare doesn’t cover ambulances. Queensland and Tasmania cover their own residents, but in other states you may need ambulance cover through your health fund, and cover can work differently interstate, so check before you go. And if you’ve paid a lot up front for a tour, cruise or accommodation you couldn’t get back, domestic travel insurance can still be worth it for the cancellation cover.
Wherever you live, the same questions apply: does your health cover work in other states or regions, does your home insurance cover belongings away from home, and what have you paid for that you couldn’t get back?
Is travel insurance worth it?
Travel insurance is worth it when the premium is small compared with what you’d lose if something went wrong, and when that loss would really hurt. For overseas travel, the medical side alone settles it for us. A serious illness, an accident or an evacuation can cost far more than most of us could pay from our own pocket.
Then add up everything else you’d lose: prepaid flights, accommodation and tours you couldn’t get back, and everything in your bags. For us, that includes cameras, an action camera, a drone, laptops and phones. Policies limit how much they’ll pay for each item, so check those limits against what you’re carrying, and check the excess too. Jewellery counts. We don’t travel with much, but our smartwatches are the most valuable “jewellery” we take, and they’re worth checking against the policy limits.
If you’re travelling light, without expensive things, a basic policy costs less and still covers medical emergencies. Just be clear about what you’re giving up.
Is annual multi-trip insurance worth it?
An annual multi-trip policy covers all your trips over 12 months. If you travel often, it may be more convenient and better value than buying a policy for each trip. Each trip usually has a maximum length, and you choose the countries or areas you’re covered for when you buy.
We used an annual policy when I was running my accounting practice and travelling for work and holidays, both in Australia and overseas. We’ve also had one annual policy with Cover-More, for the two trips we knew we were doing that year. The catch for us is that you need to know where you’re going for the year when you buy it, and that’s not always easy. Most of the time, we buy a single-trip policy for each trip.
When should you buy travel insurance?
As soon as you start booking. Buy your policy when you book your flights, accommodation and tours, not the week before you leave. That week has enough jobs of its own, and our final-week checklist covers them.
The reason is cancellation cover. With Cover-More, for example, cancellation cover starts from the time the policy is issued, and you can’t claim for something you already knew about when you bought it. Say you book a trip in March, something happens in May that means you can’t go, and you only buy insurance in August: the policy won’t help. Buy it when you book, and you’re covered from the start. Other insurers have their own rules, so check the PDS.
Lisa’s Tip
We get our travel insurance in place as we start booking our airfares, accommodation and transfers. It’s easy to leave until closer to the trip, but by then you may already have missed out on cancellation cover.
We use Cover-More for our overseas trips. You can get a quote and read the PDS on its website before you decide.
Frequently Asked Questions
Is travel insurance compulsory?
Usually not, but some countries, treks and tours require it, and Smartraveller expects all Australians travelling overseas to have it. If you’re not sure, check your destination’s entry rules and your tour’s booking conditions.
Can I buy travel insurance after I’ve left home?
Some insurers will sell you a policy once you’re already travelling, with conditions. Cover-More, for example, has a three-day period after you buy when nothing is covered, and it won’t cover anything that has already happened.
What should I do if something goes wrong on my trip?
Contact your insurer as soon as you can. Your policy will tell you how to reach its emergency assistance team if you need medical help, and some insurers want to hear about an incident within 24 hours. Then keep the evidence, such as receipts and any report from the airline, police, hotel or doctor.
Is travel insurance the same as health insurance?
No. Medicare and Australian private health insurance cover treatment in Australia. Travel insurance covers medical costs overseas, plus things health insurance never does, such as cancellations and lost luggage.
If you’re planning your first big overseas trip, put travel insurance on the list with your passport and buy it as you book. Then read the PDS, so you know what you’re covered for before you need it. The rest of the planning is in our First Journey: Plan guides.
Last updated: 14 October 2026. Government guidance, Cover-More policy terms and bank card changes checked October 2026.
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