Travel insurance premiums jump by 50% since COVID-19 pandemic

Travel insurance premiums jump by 50% since COVID-19 pandemic | Insurance Business Australia

Travel insurance premiums jump by 50% since COVID-19 pandemic

Overseas travel insurance premiums have risen by 50% from pre-COVID-19 now that Australians are allowed to travel again, according to Canstar's latest review.

The review was fuelled by more than 18,000 quotes, allowing an authoritative comparison of the impact of the COVID-19 pandemic on insurance premiums and the level of coverage and protection offered.

Confirming the rise in travel insurance premiums, the report found the average insurance premium for international travel jumped by 50% from 2019 to $320. Premiums for all age groups are higher now than three years ago, but seniors are up for the most significant increase, with their premiums rising by 59% to a shocking $462.

“The average international travel insurance premium for a senior has risen over the past three years by $172 and is now a major cost consideration before they even set foot on an aircraft,” said Canstar insurance expert Steve Mickenbecker. “Higher susceptibility to serious COVID outcomes among this group will have influenced the greater increase.”

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Canstar explained that insurance companies that have returned to the travel insurance market post-COVID-19 developed new approaches to policy design. Most insurers now have at least one policy providing overseas medical coverage for COVID-19-related claims, with only six of the 48 international travel insurers included in this year's Canstar review not having at least one policy allowing COVID-19-related claims.

“Some policies exclude COVID or pandemic-related claims altogether, while other insurers have introduced COVID-specific cover,” Mickenbecker said. “For the policies that cover COVID, there are some that cover only overseas medical costs for COVID-related claims, but not claims for any cancellations or interruptions to your travel. Others cover both of these risks.”

“In a market where there are as many as 48 international travel insurance providers, higher premiums are a tip-off to travellers that COVID has heightened their risk and that they should be looking for a policy that at least provides quality overseas medical cover,” Mickenbecker said. “Quality insurance is still available at a reasonable cost, and if you feel you can't afford the premium, you certainly can't afford the risk that you will have a major claim when travelling. A major medical issue can be life-changing financially, even after your health is restored.”

Canstar advises travelling Australians to:

  • Always compare policies;
  • Never leave home without a cover, especially coverage for overseas medical treatment including COVID-19;
  • Take cover out early because an event that causes travel cancellation might happen before leaving home and may be claimable;
  • Disclose pre-existing health issues; and
  • Read the fine print to understand what costs may be claimed on the policy, the limits attached, and what happens may lead to a claim.