Travel insurance: Why all Australians should take out travel insurance before going overseas

For most Australians overseas travel is a wonderful experience. Unfortunately, however, every day our consular officers deal with human tragedies involving the death, injury or hospitalisation of Australians abroad. Each year we handle over 20,000 cases involving Australians in difficulty overseas. This includes over 700 hospitalisations, 600 deaths and 100 evacuations of Australians to another location for medical purposes.

In cases where victims are not covered by travel insurance, such personal tragedies are further compounded by a long-term financial burden. Hospitalisation, medical evacuations, or even the return of the deceased's remains to Australia, can be very expensive. Daily hospitalisation costs in Southeast Asia regularly exceed $800; return of remains from Europe in excess of $10,000. The cost of medical evacuations from the United States regularly range from $75,000 to $95,000 and sometimes up to $300,000. The department has handled medical evacuations from nearby Bali in which costs have exceeded $60,000.

Unfortunately, not all of these cases involved travellers covered by travel insurance. Travellers who are not covered by insurance are personally liable for covering incurred medical and associated costs. As a result, we have known instances where families have been forced to sell off assets, including their superannuation or family homes, to bring loved ones back to Australia for treatment.

Despite these stark statistics, it is not the department's intention to discourage Australians from travelling, which in almost all cases is a very positive experience. Only 0.6% of Australians travelling overseas encounter difficulty each year.

Instead, one of our key messages to Australian travellers is that there are things you can do to help reduce the likelihood of becoming one of the more unhappy consular statistics. With accidents or illness often unavoidable, proper travel insurance is very important in this context. Of course, the all-too-common occurrence of theft and loss of personal belongings is also something all Australian travellers should insure against. Each year the department handles over 16,000 cases involving the welfare of Australians who have suffered illness, theft, robbery or assault.

In choosing a policy, we would note some insurance policies will not always cover claims made in those countries to which the Department of Foreign Affairs and Trade recommends against travel. For up-to-date travel advice, we recommend travellers consult and monitor this website.

Where Australians cannot obtain travel insurance to cover their personal medical circumstances, they should consider the potential financial risks very carefully before deciding whether to proceed with planned travel overseas.

For further information, the Insurance Council of Australia (PDF) and the Insurance Ombudsman Service (PDF) have issued guides on travel insurance for travellers. They cover the main issues to look for when selecting travel insurance to ensure you are appropriately and adequately covered.

Case Studies

Following are some examples of the kind of cases handled by the Department:

The reasons for Australians requiring hospitalisation vary. Cases handled by the department have included car and motorbike accidents, a simple misstep and fall at a temple, and side effects from prescribed drugs. The department advises 'if you can't afford travel insurance, you can't afford to travel'. In many of the cases it is the traveller's family who have had to foot the bill.

1. In Bangkok a man was hit by a car while riding a motorcycle. He sustained a badly fractured leg and was admitted to the nearest local hospital. His wife was with him. He did not have any travel insurance, and so had no choice as to hospital or treatment. The hospital did not have the expertise to do anything for him except clean the wound. After 3 weeks his wife asked the Embassy for assistance as parts of the shin bone had died and the fractured ends were not healing. The Embassy assisted in having the man medically evacuated to Australia for admission to hospital, at very considerable expense to his family.

2. In Bali, 5 Australians were injured in a mini-van accident. Consular assistance was limited to support and routine contact with next-of-kin (NOK), as all the Australians involved had travel insurance. The travel insurance company paid their hospital bills and arranged their medical evacuation to Australia.

3. A young man worked in a US ski resort for four months, then took time off to travel around the US. He permitted his 12-month travel insurance policy to expire just a few days before his departure for home. He was hit by a car while crossing a road and suffered serious head injuries. He was admitted unconscious to intensive care and required highly intensive sophisticated care until he was able to be flown back to Australia. He was still unconscious and returned on a stretcher. The cost to the family for the medical evacuation alone was $80,000. They have taken out a second mortgage on their house to raise the funds.

4. A young Australian surfer went to the United States for a surfing competition. Although an experienced surfer, he unfortunately chose the wrong wave during a practice session. The wave dumped him on a reef and he sustained serious injuries. He was flown to a local hospital and immediately underwent two major operations. The hospital bill was AUD290, 000. Fortunately the young man's parents had insisted he take out travel insurance before he left Australia. The insurance company covered the bill, and the young man and his family were able to focus on his recovery.