Travel insurance for tours

Most tours go exactly as planned. But an injury on a walking track, a medical emergency at sea, a cancelled flight that makes you miss a pre-paid tour, or a lost camera can quickly cost far more than the trip itself. Travel insurance exists for those moments, but only if your policy actually covers what you're doing. This guide explains what to look for, based on guidance from Moneysmart, the Australian Securities and Investments Commission's consumer website. It's general information only; it doesn't consider your circumstances and isn't financial advice.

Why insurance matters for tours

Tours often involve the activities most likely to lead to a claim: water sports, hiking in remote areas, adventure activities and long days far from medical help. They're also often pre-paid and non-refundable, so a cancelled flight or illness can mean losing the cost. Insurance can help with:

• Medical costs, including emergency treatment and, overseas, evacuation;
• Cancellation costs, if you can't travel for a reason the policy covers;
• Luggage and belongings, including cameras and phones, up to policy limits;
• Delays and missed connections, depending on the policy.

Read the product disclosure statement

Moneysmart's central advice is to read the product disclosure statement (PDS) before buying. It sets out what the policy covers, what it doesn't, the limits on each type of claim and the excess you'll pay. Comparing summary tables on a website isn't enough, because the details are in the PDS.

When you read it, focus on:

• the activities you're planning to do;
• exclusions, the situations the policy won't cover;
• limits, such as the most it will pay for a single item;
• the excess, the amount you pay towards each claim;
• conditions, such as needing to report theft to police within a set time.

Activities and exclusions

Moneysmart says many policies exclude "high risk" activities and gives examples such as parachuting, abseiling and riding a motorbike. Definitions vary between insurers, so don't assume. Activities that may need checking include:

• scuba diving, especially beyond certain depths or without qualifications;
• snorkelling from boats in open water;
• skiing, snowboarding and other snow sports;
• jet skiing, white-water rafting and canyoning;
• scenic flights, helicopter rides and hot-air ballooning;
• quad bikes, motorbikes and four-wheel driving.

Some insurers offer optional add-ons that cover specific activities. If an activity matters to you, check the PDS or ask the insurer directly and keep a record of the answer.

Alcohol and drugs

Moneysmart warns that even if a policy covers something, such as a broken leg, the insurer might decline the claim if you were drunk, affected by drugs or doing something illegal at the time. This matters on wine and food tours or at sunset drinks. Our guide to wine and food tours covers responsible drinking.

Pre-existing medical conditions

Moneysmart says you may need to disclose pre-existing physical and mental health conditions when you apply. The insurer may choose to cover them, cover them for an extra cost, or exclude them. Check how the conditions you declare will be treated before you buy, and be honest: Moneysmart stresses honesty with your insurer. The definition of a pre-existing condition is in the PDS and can be broader than you'd expect. Moneysmart also suggests checking that the policy covers your age and the ages of everyone travelling with you.

Pre-existing conditions are also important for activity safety. Workplace Health and Safety Queensland lists cardiac conditions among the factors that increase the risk while snorkelling. See our guide to snorkelling safety.

Cancellation cover

Cancellation cover usually applies only for specific reasons listed in the policy, such as serious illness or injury. It generally won't cover changing your mind. Check:

• the reasons for which you can claim;
• whether "known events", such as a storm or bushfire already in the news, are excluded;
• the maximum cancellation amount, which should cover what you've pre-paid.

Remember that you may also have rights under consumer law if the operator cancels. See our guide to bookings, cancellations and refunds.

Domestic versus overseas travel

For travel within Australia, Medicare and any private health insurance may cover some medical costs, though usually not all. Domestic travel insurance mostly covers cancellations, belongings and some extra expenses. For overseas travellers visiting Australia, medical costs can be high, so check what your policy and any reciprocal arrangements cover.

Credit card and bundled insurance

Some credit cards include overseas travel insurance, sometimes advertised as complimentary. Moneysmart says you usually need to pay for a certain amount of travel costs with the card to be covered, cover may apply only to the cardholder, and it generally only covers the trip paid for on the card. Read the PDS as you would for any policy.

Making a claim

If something goes wrong:

1. Register the claim as soon as you can. Moneysmart notes some insurers require you to tell them about incidents within 24 hours.
2. Gather evidence. Moneysmart lists proof of travel such as itineraries and confirmations, a doctor's report if you were sick or injured, a police report for theft or crime, and valuations or proof of purchase for lost items. It suggests photographing expensive items and recording serial numbers before you leave home.
3. Lodge the claim within the time limit in the PDS.
4. Keep copies of everything you send.

Moneysmart says the General Insurance Code of Practice sets out how insurers should handle claims, and if they don't meet it you can complain to the insurer. If you're not satisfied with the outcome, you can lodge a complaint with the Australian Financial Complaints Authority (AFCA), a free, independent dispute resolution scheme.

Buy early

Many travellers buy insurance soon after booking, so that any cancellation cover is in place if something happens before they leave. Policies commonly treat events that were already known when you bought the policy differently, so check the PDS. Moneysmart also notes that if the government's Smartraveller advice for a destination is ‘do not travel’, your policy usually won't cover you.

Questions to ask an insurer

• Are the specific activities on my tours covered, and on what conditions?
• What are the limits for medical costs, cancellation and belongings?
• How are pre-existing conditions handled?
• What is the excess per claim?
• What's excluded for alcohol, known events or travel warnings?
• How do I contact you in an emergency?

Other common exclusions

Moneysmart lists other situations where exclusions often apply, which are worth knowing before a touring holiday:

• acts of war, conflict, terrorism and some natural disasters;
• pregnancy-related costs;
• loss or theft of unattended luggage, so check your insurer's definition of "unattended", which matters if you leave bags on a tour bus or boat;
• travel to areas with an official travel warning;
• losses caused by the financial failure of an airline, hotel, travel operator or agent;
• pandemics and outbreaks of infectious diseases.

The financial failure exclusion is especially relevant to tours. If you pre-pay a large amount for a multi-day tour, find out how your money is protected and whether paying by credit card gives you any options if the operator stops trading.

Key points

• Read the PDS, not just a summary, before you buy.
• Check that the activities on your tours are covered; high-risk activities are often excluded.
• Declare pre-existing medical conditions honestly.
• Buy insurance early, keep records and claim promptly.
• If a complaint isn't resolved by the insurer, you can go to AFCA.