These travel insurance gaps may cause turbulence on your next holiday!

Travel insurance is a safety net, the reassuring hand on your shoulder that promises to catch you if your well-planned holiday goes awry.

What happens when the unexpected occurs, and you find that your safety net has holes?

This is a reality that many travellers face during unprecedented events during their supposed dream holidays.

Several Australians' travel plans were recently derailed when Air Vanuatu entered voluntary administration, and some were forced to book flights to replace the suddenly cancelled ones.

The Australian Department of Foreign Affairs and Trade (DFAT) advised those affected to contact the airline, their travel agent, or their insurance company regarding rescheduling flights.

However, the harsh truth emerged that many travel insurance policies do not cover a travel service provider's financial collapse.

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Travellers may avail custom-made insurance policies to tailor-fit their needs without the unexpected charges. Image Credit: Pexels/Flo Maderebner

This revelation can be particularly jarring for those who rely on travel insurance for peace of mind when embarking on their adventures.

'While a travel provider's insolvency can certainly disrupt travel plans, most insurers see it as a business financial risk rather than a risk of travel itself,' Compare Travel Insurance's Director Natalie Ball explained.

Hence, coverage for such events is excluded to keep premiums affordable.

MoneyHub's Christopher Walsh added that while some policies may offer protection against airline insolvency as an optional extra, these usually come with 'specific terms and conditions'.

Airline insolvencies are not the only surprise exclusions in travel insurance policies.

Here are several other areas where travellers might find themselves unexpectedly vulnerable:

Lost and damaged smartphones

Smartphones are people's lifelines to the world, especially when travelling. Yet, insurers do not cover lost or damaged phones during trips.

Insurers exclude coverage for cracked screens, and standard policies may not cover the total value of high-end models.

Check the per-item limits and consider coverage for expensive devices.

Jewellery and high-value items

Jewellery is often excluded or subject to strict limits in travel insurance policies.

When planning travel with expensive items, it might be wise to leave them at home or look into a standalone policy or home and contents insurance that can provide the necessary coverage.

Unattended items

Items forgotten in a taxi, at the airport, or in a hotel room might not be eligible for a claim.

It's crucial to stay alert during travels and keep valuable items within reach.

Alcohol and drug-related incidents

Enjoying a few drinks is a common way to celebrate the holiday spirit.

However, excessive consumption could nullify travel insurance coverage.

Some insurers specify a blood alcohol limit, while others may assess claims on a case-by-case basis.

Risky sports and activities

Adventurous travellers must know that standard travel insurance policies do not cover many high-risk activities.

This includes trekking at high altitudes, water sports, and extreme sports like BASE jumping.

It's advisable to seek insurers who specialise in coverage for these activities.

Passports, visas, and pets

Travel insurance will only cover you if your passport is updated.

Additionally, pet-related events, such as a pet falling ill before departure, are not covered.

For travellers who have more complex travel needs and may be more susceptible to certain risks, it's crucial to read the fine print of your existing travel insurance policy.

Customising a policy to address specific needs can help mitigate unexpected risks.

Before you set off on your next journey, take the time to understand your coverage and any gaps that may exist.

Remember, the cheapest policy is not always the best, especially when making your dream holiday a reality.
Key Takeaways

  • Many travel insurance policies do not cover airline insolvencies, which may leave travellers out of pocket.
  • Travel insurance policy exclusions include lost or damaged smartphones, lost jewellery, and unattended items.
  • Travel insurances generally exclude claims related to alcohol and drug use if they contribute to the reason for the claim.
  • Coverage for risky sports and activities is excluded or limited in standard travel insurance policies. However, travellers can purchase additional coverage for some activities.
Have you ever been caught out by an insurance exclusion? How do you ensure you're protected enough during your travels? Share your thoughts with us in the comments below!

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