The most common travel insurance claims for both commercial and leisure trips broadly fall into three categories:
- Medical emergencies abroad
- Lost or damaged luggage
- Hire car excess claims.
In this article we set out what is usually covered under a travel insurance policy and provide tips for avoiding common claims pitfalls.
Medical emergencies abroad
While travelling overseas, medical emergencies may occur as a result of a traveller falling ill or injuring themselves. This leads to the insured traveller incurring medical costs and other out of pocket expenses such as hospitalisation fees, surgery fees, and medication expenses.
It should be noted that any costs related to medical expenses within Australia are usually covered by Medicare or Private Health Funds and are therefore not covered under a travel insurance policy. Nor are medical expenses relating to pre-existing conditions.
Bellrock’s claims team have successfully advocated for full coverage of out-of-pocket medical costs and expenses relating to broken bones, digestive ailments, heart attacks, and many other injuries/illnesses.
Common pitfalls:
- Failure to declare pre-existing medical conditions is the leading cause of a travel claim being denied. Ensure your medical history is up to date with your insurer before you travel.
- Accidents occurring while under the influence of alcohol or drugs, or as a result of engaging in “high-risk” activities (e.g., specific sports) not covered by the policy, can result in denial. Familiarise yourself with exclusions under your policy prior to travel so that you can identify what activities may not be covered.
Lost or damaged luggage claims
The second most frequent travel claim relates to lost or damaged luggage or personal effects such as electronic equipment. Most claims of this nature stem from negligent baggage handling by an airline or accidental damage caused by a traveller. In the event an airline is at fault for loss or damage, they may offer some form of partial compensation or may deny liability. In circumstances whereby the airline denies liability many travel policies will respond in paying the loss in full. If the airline only accepts partial liability, then a travel policy will respond by covering the remaining element of claim to the insured traveller.
Common pitfalls:
- In cases where baggage is stolen or lost, claims are most commonly denied due to a lack of “reasonable care”. For example, leaving bags in a public place (like a cafe, airport seating, or even a hotel lobby) to go to the bathroom is considered negligence, not theft.
- Proof of ownership: Without proof of purchase such as a receipt, insurers may not cover the items. Taking photos of your packed items before you leave can be very helpful in establishing ownership.
- Itemise high value items: Check policy limits and ensure high value items such as jewellery and electronics are individually itemised.
Car hire excess
These claims occur where an insured traveller causes actual or alleged damage to a hire vehicle resulting in the hire car company seeking compensation.
It must be noted that unless a policyholder has also taken out the comprehensive motor vehicle insurance offered by the hire car company (at the time their hire commences), their travel insurance policy will not respond.
Under such comprehensive insurance, there may be a number of options available around the level of cover or excess. Policyholders should consider if a lower excess is a better fit for their circumstances, as excesses under such arrangements can often be between $2,000 to $8,000.
When this insurance has been taken out, the policyholders travel insurance policy will respond to a claim for up to $5,000 under the Rental Vehicle Excess section of their travel policy.
Common pitfalls:
- If damage occurs while the driver is violating traffic laws, driving in restricted areas, or violating the rental agreement (e.g., driving on unsealed roads) cover may be void.
- Accidents occurring while the driver is under the influence of alcohol or drugs, are excluded in most policies.
In summary, by understanding your policy coverage and exclusions and maintaining accurate documentation you can minimise inconvenience and ensure your claim is paid efficiently and to the full entitlement available under the policy.
For more information on corporate travel risk please contact us
