Travel insurer reveals hit to pocket when pre-holiday illness strikes

9 December 2021 by Laura Sedgwick

As we all start planning our summer holidays and a well-earned rest, some of us will be heading abroad, but many will prefer to stay closer to home this year. The list of most expensive domestic claims from one of Australia’s leading travel insurers is a reminder to purchase travel insurance even if you’re not leaving the country and as soon as a trip is booked – half of the claims came from customers who hadn’t yet packed their bags.

Other claims were a result of adventurous holiday activities gone wrong and an unplanned encounter with a cassowary bird in Cape Tribulation also made it onto the list.

Southern Cross Travel Insurance (SCTI) has revealed the ten most expensive domestic travel insurance claims paid to customers since launching the policy a year ago.

At the top of the list is a claim for $6,043, paid to a customer who travelled to Surfer’s Paradise with her two children with autism but had to cancel her trip and return home early when one of her children became extremely distressed due to being in unfamiliar settings.

The second most expensive claim was paid to the parents of a 15-year-old who was hospitalised in Mackay for three days due to acute appendicitis and required urgent surgery. SCTI paid $4,685 to cover their cancelled accommodation and costs for flight changes.

Several other high value claims on the list were for cancelled holidays after customers experienced back and muscle injuries or were diagnosed with an illness before they’d left for their holiday. Other claims included accidents incurred by more intrepid holiday goers such as cycling accidents and even an alpine horse safari injury.

Southern Cross Travel Insurance CEO Jo McCauley said these claims show that holidays in Australia can be as expensive, if not more, than heading overseas, and demonstrates why travel insurance is just as important for trips closer to home.

“Following the outbreak of COVID-19, there has been a heightened sense of what could go wrong on holiday, and we’ve seen this reflected in the growing number of people purchasing domestic travel insurance with SCTI.”

“Interestingly, people commonly purchase insurance because they want to be covered while they’re away on holiday, but our biggest number of claims show that the unexpected can happen beforehand, regardless of whether you’re travelling domestically or abroad. Unfortunately this can have a serious hit to your pocket if you don’t have travel insurance,” said McCauley.

Customers needing to change or cancel their journey accounted for 39 per cent of the total value of domestic travel insurance claims paid out by SCTI over the past year.

“The customers who’ve had to cancel their holiday due to injury or illness have been across all age groups, which goes to show it’s not just older people that need to be purchasing travel insurance. We should all be factoring travel insurance into the holiday planning process to insure against the unexpected,” said McCauley.

“Following the easing of state border restrictions, Australians are eager to go on a domestic holiday again and take full advantage of their new found freedom by ticking off some adventurous activities from their wish lists. To make sure you’re not left out of pocket it’s important to purchase travel insurance and check the policy to ensure it covers the activities you’re planning on enjoying as part of your holiday.”

A 75-year-old man had to cut his holiday short when he fell off his horse and suffered a collarbone fracture on an alpine safari. Fortunately, the customer had travel insurance and was able to claim for the unused, non-refundable cost of the tour and accommodation, which came to $3,256.

Another incident saw a customer suffer multiple fractures when he fell off his bike on the first day of a six-day biking tour in Tasmania. Unfortunately, he was hospitalised for three days and was unable to complete the cycling tour. SCTI paid $4,536 to cover the non-refundable tour and missed accommodation.

Another benefit of SCTI’s domestic travel insurance policy is cover for rental car excess.

“If someone hires a vehicle and the vehicle is damaged or stolen, an excess of thousands of dollars can be charged. Vehicle rental companies will often recommend customers pay an additional daily fee to reduce or waive this excess and this fee can quickly add up. Many Australians are unaware that purchasing domestic travel insurance can be much more cost-effective than paying for excess reduction directly through a rental vehicle company,” added McCauley.

SCTI has calculated that over the summer holidays, a customer could pay approximately $121.80* for a 14-day domestic travel insurance policy for two adults aged 40 years-old and two dependent children, which includes cover for their rental vehicle excess**.

“We have worked out that when hiring a typical family car over a two-week period, the excess reduction alone could cost over three times what you would pay for a domestic travel insurance policy with SCTI,” said McCauley.

“With the summer holidays coming up and international borders still uncertain, a road trip is a great way to see the country, and domestic travel insurance can help reduce the cost of a hire car.”

Damage to a hire car made it onto SCTI’s most expensive claims list with one customer claiming $2,750 for damage to a rental car when a Cassowary bird ran into the road and hit the front of the car during a visit to Cape Tribulation.

Southern Cross Travel Insurance’s top 10 most expensive domestic travel insurance claims paid:

  1. A customer from Melbourne had to return early from Surfer’s Paradise after her 6-year-old child with autism became extremely distressed due to the unfamiliar surroundings. The child's autism was declared and covered as a pre-existing medical condition (claim paid - $6,043)
  2. A 15-year-old and the family had to return early from Mackay due to acute appendicitis and required urgent surgery (claim paid - $4,685)
  3. A 47-year-old had to cancel their six-day bike cycling tour in Tasmania after falling off the bike on day 1 of the tour and sustaining multiple fractures (claim paid - $4,536)
  4. A 65-year-old had to cancel her trip after sustaining a bicycle injury in which they suffered a nerve impingement and muscle inflammation (claim paid - $4,021)
  5. A 59-year-old had to cancel their trip due to being diagnosed with a relapse of cancer (claim paid - $3,339).
  6. A 24-year-old had to cancel their trip after sustaining a work place injury (claim paid $3,318)
  7. A 75-year-old had to claim after they fell off a horse during their alpine horse safari (claim paid - $3,256).
  8. A 44-year-old had to cancel her trip to Cairns and return to Brisbane following news her 6-year-old child has been hospitalised following an accident (claim paid - $2,871)
  9. A 48-year-old had to claim when a Cassowary bird ran into the road and hit the front of the car during a trip to Cape Tribulation (claim paid - $2,750).
  10. An 87-year-old had to cancel his trip after his wife was diagnosed with breast cancer and had to undergo surgery (claim paid - $2,400)

*Calculation based on:

● $121.80 –Rate based on two adults aged 40 years-old and two dependent children, fourteen days cover ($100 excess selected).

**SCTI does not charge an excess under its rental vehicle excess benefit. The maximum cover is $6,000 per paying person.