What Does Travel Insurance Cover?

If you're about to head off traveling, whether it's a business trip, a beach bum holiday or a round-the-world no-holds-barred adventure, you need travel insurance. Anything can happen, and often does - looking at the annual statistics showing the thousands of travellers who get into sticky situations. It's important to know exactly what your travel insurance covers, so you know if you're getting the right cover for you.

What's Normally Included

The following areas are normally covered by travel insurance, but it's important to know to what extent. For example, if you buy certain budget options, you may well be covered for theft of property, but if your laptop is worth $2000, it's a bit pointless if your policy only covers you up to $500. You should also look at the 'excess' - this is the amount you need to pay yourself in the event of a claim, before any payments are made back to you.

o Overseas medical/hospital expenses: The amount you are covered for can differ wildly depending on which policy you opt for. If you have a pre-existing condition, the company should be aware of it, or your cover may be void.

o Overseas emergency medical assistance: As above, if travelling to countries with high healthcare costs, such as the USA, it's a good idea to have this one marked 'unlimited'.

o Luggage/Personal Effects: Consider the figure given for this - if you are travelling with particularly expensive equipment, it should be covered. This also covers travel documents.

o Accidental Death: Arguably benefiting your loved ones more than you, but worth considering.

o Permanent Disability: Most policies cover this.

o Delayed Luggage Allowance: If your clothes arrive a week after you, you might need some fresh ones.

o Personal Liability: If you cause an accident, you'll need to pay damages.

o Cash: Cover for money stolen from your person.

o Cancellation Fees and Lost Deposits: If for any (good) reason you are forced to cancel or delay your trip, such as illness or poor weather.

o Alternative Transport Expenses: such as in the event of flight cancellation

o Additional Expenses: a whole range of unforeseen circumstances can lead to you incurring extra costs.

o Hijacking: An unlikely one, but expensive policies often cover for this. If you're not worried, don't fork out for it.

o Loss of Injury: Again, some more expensive policies will cover you if you sustain an injury overseas and cannot work upon returning to Australia.

o Travel Services Provider Insolvency: In the unlikely event of your airline going bust before you have a chance to board, some policies will have you covered.

Top 5 things to look out for when choosing travel insurance

Many people find it a pain buying insurance, but make sure you don't get caught out!

1. Ensure that if you're likely to do a dangerous activity, such as paragliding or scuba diving, that you check if you're covered for it - many insurance companies hate such activities as they cost them too much money.

2. Make sure that you have enough cover. Medical costs can be huge in certain countries, while budget insurance deals can leave you paying for half of your stolen camera despite being covered. If you're carrying a lot of expensive gear, make sure you're covered for all of it. Also, check what the excess is. If you have to pay $100 and your MP3 player that accidentally went scuba diving with you was five years old already, think twice.

3. Do you have existing medical conditions? You might not be covered - so own up before to make sure.

4. Other general exclusions include acts of war, loss of property due to extreme carelessness, or self-inflicted injury.

5. And finally, make sure you are covered for the full duration of your trip - a common error is to get international dates mixed up - just because your Sydney-bound flight leaves L.A. on the 14th, doesn't mean it's still the 14th when you arrive! Last minute bungles do happen!

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