Was your holiday safe? 3 things you should know about travel insurance

For most of us, the holidays are already over. For some of us, it was the break we needed. For others, well, they spent most of last week trapped in Thailand because of a massive storm. I’d hope they all had proper travel insurance.

And bad weather is only part of holidays from hell. In this article, I’m getting interviewed about the major ways you can be stranded by inadequate travel cover. It’s all about:

  1. Where you go
  2. What you do
  3. Who you bring.

So, let’s get into it…

1. Where you go – hazardous locations

Question: So Morgan, the first point you mention is ‘where you go’. What does that mean?

My answer: There are places your insurer is not keen on covering. Typically, they’re whole-of-country exclusions – usually conflict zones, places like Afghanistan and Iraq. Some policies request that you comply with DFAT recommendations – that’s the Smart Traveller site. Smart Traveller can be a bit Chicken Little though. You’d think Belgium would be as safe as it gets, but it currently has a high threat level due to a failed terrorist attack in June 2017.

Q: This could be tricky. Belgium is a tiny country in the Schengen zone: if you’re in a tour bus, the highway might go in one border and out the other half an hour later without you knowing.

My answer: Correct. You have to understand your policy and know if you’re going to have an excluded claim however you end up in a country. If you’re flying from Europe to Australia with a stopover in Abu Dhabi, that’s fine: most policies will not exclude transit locations. But if your stopover is diverted to Turkey, that’s a higher-risk location. Again, the point here is to understand your policy and how it will respond.

Q: So, what should you look for in your policies regarding hazardous locations?

My answer: Look out for any terms like ‘transit countries’ and ‘modes of transport’. Read all the conditions and policy wordings around those terms. If something doesn’t add up, call your insurer and get answers.

Q: Any real-life examples of travellers who’ve come into trouble through being in a hazardous location?

My answer: Happens all the time. Only the horrific cases grab headlines. There’s those Aussie surfers who tried to drive across a sketchy part of Mexico and there was that attempted machete carjacking in Kenya recently. Most of the time, it’s nothing like that. Usually, it’s like the woman who broke her ankle badly on a cruise ship in Indonesia. Her travel insurance policy gave her – amongst other benefits – unlimited medical cover. She chose to be airlifted off the cruise ship and taken to a reputable hospital rather than go to the nearest one in Indonesia, fearing the level of medical care would be substandard. Obviously, not all policies afford this level of choice. It’s another thing to look for in your policy wording.

Q: How can an insurance company even know what’s going on in these places?

My answer: They employ people specifically to monitor conditions on the ground and also use sites that pull intelligence reports from agencies around the world, including Interpol. For example, Chubb uses the WorldAware service, which has something like 150 intelligence analysts on staff.

2. What you do – risky activities

Q: Okay, so there are hazardous places, but can’t you get hurt anywhere?

My answer: Yes. You can be in a safe location, but still engaging in a risky activity. A classic is hiring a scooter in Bali: there’s probably very few travel insurance policies that cover driving a motorscooter by default. There are also lots of other activities not covered as standard: scuba diving, snowboarding, hang-gliding, parasailing, mountain biking, fishing, spearfishing etc.

Q: But those are exactly the kinds of things people do on holidays!

My answer: Correct, and that’s why you have to read your terms and conditions. Most people are buying these policies online or through a travel agent who is not versed on insurance. So, it’s up to you to read the exclusions. If you don’t understand something, seek help from an expert.

3. Who you bring – travelling with family, friends and kids

Q: How does travel cover work for people you’re travelling with? Where is the limit with spouses, kids, relatives and friends?

My answer: Some policies cover your whole family. Some policies will only cover you personally. Some will cover financial losses for your overall group. This actually happened to me: my wife and I were going snowboarding in New Zealand with another couple. We’d all booked together. The day before we were due to depart, I suffered a grade-3 tear to my calf muscle. Hello crutches, goodbye skiing trip. Because I’d been careful in buying our insurance, the whole group was reimbursed. In no way is that a given in every travel insurance policy.

Q: How many people does an off-the-shelf holiday policy usually cover?

My answer: It will usually say the ‘insured’ which is the policy-holder. Some policy wordings broaden the definition of the insured to include ‘spouse and dependents’. A dependent is someone who’s financially beholden to the policyholder. I have plenty of clients taking their retired mother on their trip as a babysitter for the kids. Both the mother and the kids are technically ‘dependents’ – depending on the policy wording.

Q: What about ‘spouse’, how is that defined? Marriage has changed over the past couple of years.

My answer: Yes. There is an increasing population of same-sex couples, so this is important. In a contract of insurance, if a word is not listed in the policy with a specific meaning, then typically it adopts the meaning in the normal English language. So, let’s look up ‘spouse’:

That’s pretty clear-cut then. Also, from an insurance point of view, it doesn’t usually matter if the place you’re visiting doesn’t recognise your marriage. It’s about the law where the policy was issued.

Getting good travel insurance is crucial

So, that’s a quick overview of my thoughts on travel insurance. Overall, I think travel insurance should be mandatory. I don’t just say that because I’m in the insurance industry.

I don’t want anyone to face the very stark choices of having a serious incident overseas and not having the insurance to match.

All this brings us to…

Q: Okay Morgan, final question: isn’t a tailor-made travel insurance policy more expensive than one from a comparison site?

My answer: No. Not always. A properly tailored policy can be more cost-effective than a standard online one because there’s more to coverage than the price.

  • What is actually covered in your policy wording?
  • How long does it take to get certain things included in your policy?
  • Will you be able to get fast customer service when you’re in desperate need?
  • How soon can your insurer settle a claim?

Every time you trade a lower price for compromises on those things, you edge away from cost-effectiveness.

Take my claim about the skiing trip. I got that through an online insurer. But, I have been in insurance for years and years. I was able to articulate the claim form in a way they would understand. I was able to provide the information they needed in order to pay my claim quickly. Because I know the industry, I was able to get a good, quick result from an insurer that didn’t have a call centre at all.


I know my usual sign-off is that the right insurance means you can Risk-Reward-Repeat – well, holidays are different. When you get the right travel insurance, you’ll know you’re covered no matter what. And that means you can Recline-Recharge-Relax. And that’s what I pray you’ve just been able to do.

But, if you’ve ever had a holiday from hell, let us know. I’m genuinely interested.

My Top 3 Tips For When You Buy Insurance Online

You need insurance for many of the good things in life – travelling, running a business, buying your home, etc. These are all important things to protect from hazards, however no one teaches you how to buy the insurance to give you that protection. Especially not many of the insurers selling it.

When most of us – I’m including both consumers and businesses here – go to buy something, we look online for what we think is a good deal. We’re blissfully ignorant that taking this route can leave you high and dry if you need to make a claim. Even if you’re usually pretty switched on, you don’t know what you don’t know (we’ll get into that later).

So, if you’re thinking about buying insurance online but are worried about wasting thousands on a policy that won’t come through, this is an article for you.

Based on my 13 years as an insurance broker, these are the top three common mistakes people make when buying insurance online.

1. Putting  The Wrong Business Name on the Application

Getting your name right on a form seems like primary school stuff, but people get it wrong on their insurance forms more than you can imagine. While a fat-fingered typo won’t necessarily be a deal-breaker, forgetting to add the correct business identifier or writing in something altogether different from your business name could be.

I’ve seen countless businesses that might have come undone because:

  • They’ve registered under the parent company’s name, but are trading under a different business name.
  • They’ve changed their business name, but the old name is still listed on their policy.
  • The name of the business they’re trading under is incorrectly listed in their policy documents, and actually describes another company with a similar name.

When scenarios like these come up, the result is usually a lively discussion between the policyholder, the insurer and sometimes the ombudsman about the purchaser’s “intent”.

If you bought the policy in good faith but under a technically “wrong” business name, you may still be able to claim, but is that an argument you want to have after you’ve just suffered a significant loss?

If you’ve used one business name instead of another because the business you’re actually trading under has a dubious past, the insurer will most likely not view that as good faith – more like deliberate non-disclosure. It’s very likely you can say goodbye to your claim, your cover and all the premiums you’ve been paying out!

What’s the easiest way to avoid this situation? Get advice someone you can trust!

2. Thinking Near Enough Is Good Enough When Listing Your Occupation

Drop-down menus catch a lot of businesses out when they’re applying for the regular forms of insurance, such as business insurance, public liability or professional indemnity.

Here’s how it happens:

  1. The site asks you to choose your occupation from a drop-down menu.
  2. Your exact business type is not listed, but there is one that seems close enough.
  3. You pick that one.
  4. You click “Buy”.
  5. Congratulations, you just bought an insurance policy covering work you don’t do!

Case in point: I recently worked with a hi-tech cleaning company that microbially purifies business premises top to bottom. The business thought it was doing the right thing when buying insurance through a comparison website. Later, when the owner came to me to review the policy, I saw the business was categorised as carpet cleaning.

The business hygiene provider had already been operating for months. If an incident had occurred regarding any operations not related to carpet cleaning, then they wouldn’t have had any cover at all! Like any innovator, this business didn’t fit neatly into any of the standard menu options. We soon got their insurance sorted out through working directly with the insurer.

If you’re not sure if you’ve listed your occupation correctly, don’t be an ostrich. Pull your head out of the sand. Pick up the phone and ask your insurer to specifically note your occupational duties on the policy. If they won’t, there’s probably a good reason: they don’t cover those activities. Find an insurer who will or find someone who can help you get it right.

3. Relying On Comparison Websites For All Your Research

Comparing policies online might feel like due diligence, but comparison websites aren’t actually there to give you great protection; they’re designed to make money from referrals.

Here’s why comparison websites rarely offer business owners the best value:

  • They offer one-size-fits-all policies: Your business is (or should be) different from every other company in your industry. Your insurance has to reflect that. Comparison sites don’t give much opportunity to tailor a policy to your unique risk profile. This means most people who buy online either end up underinsured (i.e. with spotty coverage) or overinsured (i.e. paying excessive premiums).
  • The pool of insurers they draw from is tiny: As insurance brokers, we can access about 140 different insurers and thousands of policy wordings. As a consumer on a comparison website, you can only choose from maybe 6 to 10 different options. Plus, you have no way of knowing how the insurer you select responds to claims. We, on the other hand, know which insurers have a reputation for wriggling out of paying and which ones are known for behaving themselves when claims come up.
  • The devil is in the detail: It’s not always easy to know what you’re signing up for. Just like I have good knowledge about contracts but always get a lawyer to review mine, it’s always a good idea to get an insurance broker to review your policy before you sign it. At the very least, make sure you know the definitions, understand the policy limitations and are across the sub-limits.

A Simplistic Solution Usually Causes More Problems Later On

There is a big difference between simple and simplistic:

  • Something made simple still works properly
  • Something made simplistic doesn’t.

Buying business insurance can be a simple process if you have the right advice. But buying business insurance online is usually a simplistic process because you don’t have the right advice. You will pay good money for a piece of paper that says “policy”, but how much faith can you put in it?

Did you just bet your entire business on a policy you bought from a “Meerkat” after 10 minutes of clicking drop-down boxes with options that seemed close enough?

An online comparison site might be completely fine if you have a mainstream kind of business. However, if your business is an innovator or a little left-field – like the corporate hygienist in the example – you’re going to find plenty of things the comparison sites can’t do.

So, get your existing policy out or download all the details on the one you’re thinking of buying. If there is anything you don’t understand, that’s your trigger to call someone you trust to get an explanation.

My advice is that diving in and buying insurance without a good level of understanding is a not a good business risk to take.

The way I see it, your edge in business comes from controlling and consciously engaging with certain ‘good risks’ on an ongoing basis. It’s why I always say Risk-Reward-Repeat. The other side of this is that your business insurance is there to mitigate the bad risks.

So, don’t make buying your insurance a bad risk in the first place.

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