Southern Cross Travel Insurance (SCTI) has reported that insurance claims for domestic travel are approaching parity with international claims in terms of both frequency and payout size.
From May 1, 2024, to April 30, 2025, the insurer paid claims on 7.9% of its domestic travel policies, with the average payout amounting to $1,170.
In comparison, the average payout for international claims over the same period was $1,466.
The data underscored how local trips – often perceived as lower risk – can lead to substantial financial exposure when disrupted.
While domestic travel policies are generally less expensive than international ones, SCTI data revealed that they can still result in sizable claims. For example, a week-long domestic trip for an individual might be insured for $76.65, while a family of four could pay approximately $153.30.
Significant domestic claims processed in early 2025 included medical cancellations due to cancer diagnoses, travel interruptions caused by severe weather, and complications from pre-existing conditions.
One claim related to hospitalisation for a pneumothorax led to a payout of $11,733, while others ranged from $6,000 to over $8,000.
One feature attracting attention is the policy’s rental car excess cover. In New Zealand, rental vehicles typically include basic insurance components such as collision damage waivers, theft protection, and third-party liability.
However, the excess – what the customer is liable to pay in the event of a claim – can range from $3,000 to $5,000.
SCTI’s policy includes up to $6,000 to cover rental vehicle excess, potentially removing the need for additional coverage sold by rental companies.
As of 2025, SCTI reported paying $42,000 in excess-related claims, averaging $1,300 per incident.
These figures reflect broader shifts identified in SCTI’s Future of Travel survey, conducted in November 2024.
The survey of 1,002 New Zealanders revealed that 73% are more likely to purchase travel insurance due to geopolitical instability, while 78% now see insurance as a key component of their travel planning.
SCTI chief executive Jo McCauley said emerging global events have made risk management more prominent in consumers’ planning.
“Nearly 80% of the New Zealanders we surveyed indicated that the increase in conflict in many parts of the world has made them feel less secure and more inclined to take out travel insurance. So, we’re keen to ensure travellers are fully aware of how insurance can respond in these situations,” she said.
