Why Do I Need Travel Insurance?

Asking yourself why you need travel insurance for your holiday? Compare with Savvy and understand the benefits.

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, updated on September 4th, 2023       

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Travelling overseas, or even domestically, can be expensive when you start to add up the cost of flights, accommodation and any tours and activities. You might find yourself asking yourself: “why do I need travel insurance? ” Savvy can help you answer that question.

We show you some of the ways having the right travel insurance can save you time and money when you’re travelling here or abroad. Compare with Savvy today and find how out why you need travel insurance today.

Why do I need travel insurance for my next holiday?

Whether you've splashed out on a no-expense-spared trip around the world or taking a cruise around Europe, there are many reasons why travel insurance is a must.

When you purchase a travel insurance policy, you get protection against a slew of unexpected expenses, from overseas medical and hospital bills to cancellation-related costs or those associated with travel delays. In addition, your travel insurer can arrange reimbursements on a range of pre-paid costs, including flights, accommodation and tours. Some of the other benefits usually included in a travel insurance policy are:

  • Accidental death: if you unexpectedly pass away while travelling abroad, your insurer can coordinate with local authorities to bring you home and pay for your burial expenses.
  • Loss, theft or damage to your baggage: comprehensive travel insurance policies cover the expense of replacing your belongings up to a particular limit in the event of their loss, theft, or damage (between $5, 000 and $15, 000 worth of cover).
  • Loss of wages: if you get sick or injured and cannot return to work, your insurer can pay up to a certain amount for your lost income.
  • Permanent disability: if you are permanently disabled due to an accident, your insurance company will pay you a specified sum, which can be up to $50, 000. If you're in an incident which isn't insured, you won't be able to claim back any money.
  • Pre-existing conditions: persistent diseases like asthma and certain forms of diabetes are covered by comprehensive health insurance plans.
  • Personal liability: to the tune of $5 million, your insurer can cover any legal costs if action is taken against you for an accident or harm to a third party.
  • Rental car excess: renting a vehicle might be a convenient option if you find yourself needing wheels. Coverage for the vehicle's excess can be provided following an accident.

One of the critical reasons travellers take out travel insurance is to protect themselves against huge out-of-pocket costs if they are injured or suffer an illness while overseas. Depending on the country you visit, you could end up paying tens of thousands of dollars in hospital bills if you don't have travel insurance and your destination doesn't have universal healthcare.

While it may be tempting to scrimp and save and not purchase travel insurance because you feel it's too expensive, think again. Buying a policy could be not even one-tenth of the cost of your trip, with basic policies costing anywhere from $60 depending on the country you visit and the duration you're away. It’s also important to consider the peace of mind an insurance policy can give you, as you won’t need to worry as much about being caught out and forced into a significant outlay while on holiday.

What types of travel insurance cover can I choose from?

Just like picking the best shoes for your European holiday or the right jacket for a trip to the snow, you are spoilt for choice when it comes to choosing the right travel insurance. In most cases, you’ll get the following coverage options when you are purchasing travel insurance:


This policy protects overseas travellers. Good international travel insurance will cover all of the above areas, with medical bills being the most critical aspect. Australians typically purchase travel insurance due to the high cost of medical treatment overseas (especially if the country they visit doesn't offer universal healthcare). Being abroad may be scary in this aspect, so being covered is essential.


If you're travelling within Australia, finding the best domestic policy will be the key to giving you peace of mind. These policies cover much of the same areas as an international policy, but medical isn't covered if you haven't left the country. Most travellers get this insurance to avoid expensive cancellation penalties if anything goes wrong before or during the trip.


Basic coverage covers medical costs and personal liability for those travelling on a tighter budget, such as backpackers or students. These plans are cheaper than comprehensive policies and might allow you to pay extra to cover your baggage and personal items. Comprehensive

This top-of-the-line insurance offers the key features listed above, including cancellation, delay protection, and luggage loss while travelling. This type of policy is more expensive than basic cover but gives you broader coverage.


If you’re only planning a one-off trip, you may consider a single-trip policy. This covers you for a single journey which starts and ends in Australia. If this is your only holiday in the next 12 months, it's probably your best travel insurance choice.


Frequent travellers may want annual or multi-trip insurance, which covers all of their travel for a year. If you travel interstate or internationally often for business or leisure, yearly coverage may be cheaper. However, you may be limited to between 15 and 90 days' worth of travel over the 365 days.


You can purchase a one-way travel insurance policy if you're moving overseas or just taking a trip with no return ticket booked. You get the same cover as other types of policy; you just don't need to be coming home to buy one.

How do I compare travel insurance cover to get the best policy?

Making a quick comparison is always the best way to find a tailor-made travel insurance policy for you and your trip. Whether you’re driving to Darwin or catching a flight to Europe, shopping around before you leave will allow you to sniff out the best possible protection.

When you’re comparing policies, it’s essential to weigh up some individual factors, including:


When you find a travel insurance policy that tickles your fancy, you’ll pay a premium to buy it. While insurers use the same principles to calculate your premium, the price tends to change between providers. That’s why it’s worth doing a price match between quotes to find an affordable policy which gives you the cover you need.


There’s no point taking out travel insurance if it doesn’t give you the necessary coverage. That’s why it pays to make a comparison between policies to ensure your cover affords you the protection you want. For example, some policies may not automatically cover your pre-existing condition. A quick comparison with Savvy will help you find the protection you need.


You'll need to pay an excess if you’re claiming your travel insurance. An excess is an out-of-pocket cost deducted from the amount you receive back from your claim. Standard excesses can vary between $100 and $500, so it pays to shop around and find one sufficient for your travel plans.


There are caps on how much you can claim on your travel insurance for different incidentals. These claim limits differ from provider to provider, so it’s worth shopping around to find a suitable set for your travel plans and what you’re taking. For instance, while some insurers allow you to claim up to $250 per day if your flight is delayed by more than six hours, others only allow you to claim between $100 and $200 for each 24-hour period you’re left waiting for your flight.

More questions answered about why you need travel insurance

Do I still need travel insurance if I’m fit and healthy?

Injury and illness can happen to anyone, and you’re not immune just because you’re fit and trim. If you’re travelling to America to hit the slopes as an experienced skier, for example, you could suffer a range of injuries which could land you in a hospital bed, so it pays to have cover in the event you need it.

Why do I need travel insurance for a domestic cruise?

Finding the best travel insurance for your next cruise is essential, even if you’re just cruising through Australian waters. Many internationally-owned cruise liners don’t have Medicare-registered doctors onboard their ships, so if you require medical assistance and don’t have travel insurance, you’ll be left with a hefty bill.

Do I need to take out a separate travel insurance policy for my kids?

No – most travel insurance companies will allow you to include any dependent children in your own policy, as long as they meet several conditions. These include that your children be under 21 to 25 years old, stay with you on the whole journey and not be working full-time.

Do I need travel insurance to cover COVID-19-related costs?

Yes – it's important to check that your policy covers the cost of any COVID-19-related medical expenses and cancellations. If you test positive for COVID-19 just before you’re set to leave, this can allow you to be reimbursed for any pre-paid costs such as those for flights, accommodation and any tours.

What influences the cost of my travel insurance policy?

How much travel insurance costs is largely determined by a unique set of variables. Some of these include:

  • Age
  • Destination
  • Level of coverage
  • Length of your trip
  • Any pre-existing conditions you suffer from
  • Any optional extra coverage you need
How do I make a claim on my travel insurance?

When you file a claim on your travel insurance policy online, you’ll find it’s usually streamlined and easy to follow. Follow these steps when dealing with your insurer online:

  • Enter your policy number and the email address
  • Be as specific as possible on your claim form
  • Include any relevant paperwork, such as bills and medical records. Submit your claim


You should hear back from your insurer within 10 business days. It's best to answer immediately to any requests for clarification so as not to hold up the process.

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We do not compare all travel insurance brands currently operating in the market. Any advice presented above or on other pages is general in nature and does not consider your personal or business objectives, needs or finances. It’s always important to consider whether advice is suitable for you before purchasing an insurance policy.

Savvy earns a commission from our partners each time a customer buys a travel insurance policy via our website. We don’t arrange for products to be purchased from these brands directly, as all purchases are conducted via their websites.

Before purchasing your policy, we recommend you refer to the provider’s PDS for any further information on the terms, inclusions and exclusions.