AA Travel Insurance research indicates that fewer than half of New Zealand adults routinely buy travel insurance for overseas trips, and about one in five say they would not know how they would pay for medical treatment if they needed care while travelling abroad.
In a nationwide survey of more than 1,200 adults, AA Travel Insurance found that 48% purchase travel insurance every time they leave New Zealand. Another 21% reported that they rarely or never arrange cover when travelling overseas. At the same time, 61% of respondents said they believed it was unlikely, or that there was no chance, they would face a situation requiring medical treatment while abroad. Despite this low perceived risk, 22% acknowledged they would have no clear plan for funding treatment if a medical event occurred.
AA’s head of financial services, Ben Rose (pictured), said the survey points to a gap between traveller expectations and their financial arrangements for health events overseas. “Kiwis are naturally optimistic, and there’s often a sense that things will work out, or that serious issues won’t happen to us. That’s why many people see travel insurance as optional. But the financial impact of a single overseas medical event may be significant, and it can be exactly the kind of unexpected situation insurance is designed for,” Rose said.
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According to AA’s data, international travel from New Zealand has recovered strongly. Prior to the recent conflict in the Middle East, 55% of New Zealanders had travelled overseas in the previous 12 months. However, based on the survey responses, many of those trips are unlikely to have been insured on a consistent basis. Respondents most commonly reported travel to Australia (46%), followed by Asia (26%), the UK and Europe (17%), the Pacific Islands (13%), and the US/Canada (11%).
New Zealand’s reciprocal health agreements with Australia and the UK give eligible travellers access to certain publicly funded services, but AA noted that these arrangements are constrained and do not apply to all treatments or destinations. Other health systems operate under different rules and cost structures, and OECD data place the US and several European countries – including Switzerland, Iceland, and Norway – among higher-cost environments in the developed world.
In the US, AA pointed to estimates that a single emergency room visit can range between $2,500 and $5,000 before diagnostic testing or follow-up treatment. Costs for hospital stays, surgery, or medical evacuation can be materially higher. Claims experience supports the view that health issues overseas occur regularly. Over the 12 months to Feb. 28, 2026, one in five claims handled by Cover-More New Zealand related to medical or dental treatment, alongside trip cancellation and additional expenses as leading claim categories. “Travellers often assume they’ll be treated the same way they are in New Zealand, but overseas healthcare systems operate very differently. Without insurance, costs can escalate quickly,” Rose said.
The AA survey also asked respondents how they would meet the cost of an overseas medical incident if they did not have travel insurance in place. Forty-five percent said they would rely on personal savings to pay for treatment. Beyond that, 9% said they would ask friends for financial assistance, 26% said they would turn to parents or other relatives, and 5% said they would consider fundraising, including online campaigns. Seven percent said they would have no way to pay at all. The data show differences by income level. Among lower-income households, 17% reported that they would have no means of paying for overseas medical care, compared with 9% of higher-income travellers.
Rose said savings and informal support may not be sufficient or available at the time costs arise. “Many people assume their savings would cover a medical event, but overseas healthcare costs, particularly hospitalisation or medical evacuation, can quickly exceed what most households could afford. We’ve seen how quickly communities rally around someone in need, but goodwill isn’t a financial plan. For families, it can become a crisis managed from home, with relatives scrambling to organise funds while someone is in hospital overseas. Insurance is about having protection in place before you need it,” Rose said. He characterised the findings as a case of underinsurance rather than deliberate risk-taking. “There’s a real ‘she’ll be right’ attitude when it comes to travel. But overseas medical costs aren’t something you want to leave to chance. In a foreign country, a broken arm or serious illness can come with a price tag that may shock people,” he said.
AA’s findings are consistent with a March 2026 update from personal finance website MoneyHub, which reported that about one in three New Zealanders travel overseas without any travel insurance. Based on more than 500 sample quotes from over 10 insurers across 20 destinations and different traveller profiles, MoneyHub found that the premium difference between the lowest-priced and more comprehensive policies is often less than $20, depending on the trip.
The guide reported that cheaper policies are more likely to include lower luggage limits, capped medical benefits, and narrower cancellation provisions, which can translate into smaller payouts when a claim is made. Luggage cover limits in the examples ranged from around $10,000 to approximately $25,000, while medical cover options extended from capped benefits in the $10 million to $20 million range to policies offering unlimited medical cover.
MoneyHub also noted typical conditions in complimentary credit card travel insurance, such as the need to pay for travel using the card, maximum trip durations, exclusions linked to pre-existing medical conditions, and more limited cover for travelling companions. The guide further observed that only four underwriters sit behind New Zealand travel insurance brands and are responsible for assessing and paying claims, regardless of the retail name on the policy.
