Are Australians paying more for travel insurance?
Are Australians paying more for travel insurance? | Insurance Business Australia
Insurance News
Are Australians paying more for travel insurance?
Australian travellers speculate on the possibility of being “ripped off”
Insurance News
By
Jonalyn Cueto
Australians may be shelling out more for travel insurance compared to their overseas counterparts.
“Travel insurance is much cheaper overseas than here in Australia,” a reader of The Sydney Morning Herald’s “Traveller” column wrote. The reader said that relatives in Europe enjoy year-round, worldwide coverage without age or health restrictions at lower costs. The question looms: Are Australians getting the short end of the stick?
A recent report highlighted disparities were revealed when comparing prices across borders; however, it was not necessarily a blatant rip-off, the Herald reported. The report gave an example of a 43-year-old UK resident embarking on a solo trip to Indonesia, Singapore, and Thailand in April 2024. They’d pay $105 for a basic Allianz Bronze policy. In contrast, an Australian of the same age, itinerary, and travel dates would fork out $174 for the equivalent Allianz Basic coverage.
On the other hand, a US resident faces steeper prices, with a basic policy costing $284 for a $6,900 trip and soaring to $420 for a $9,960 journey, according to the Herald. European variations are evident, too. While a British resident pays $105 for the same Allianz policy, a German counterpart shells out $347 for a month in Southeast Asia.
Factors behind insurance costs
Gary Ross Hunter, a travel insurance expert at finder.com, shed light on the complexity of pricing differentials.
“There are lots of reasons insurers charge different prices, including the risk the specific insurer is willing to take, the brand’s position in the market, its overheads,” Hunter told the Herald.
“It’s like anything really. Take coffee. It’s basically the same thing wherever you buy it, but there are lots of reasons businesses charge different prices, from the supply chain down to the price of rent in the cafe that sells it.”
Travel insurance premiums hinge on several variables: coverage extent, destination risks, traveler age, pre-existing conditions, and adventurous activities. Additionally, the policy’s home country influences premiums, with higher risks or payouts leading to elevated costs.
Addressing the possibility of purchasing insurance abroad, the answer is a resounding no. According to the report, travel insurance mandates procurement in one’s primary country of residence.
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