Travel Insurance Prices Taking Off as 20% of Travellers Go Uninsured

As travel demand continues to soar, Australians are facing a growing dilemma when it comes to travel insurance: higher premiums and a significant number of uninsured travellers. New research from Canstar.com.au reveals that a staggering one in five Aussie travellers—20%—are choosing to forgo travel insurance, putting themselves at potential financial and health risks. With insurance premiums rising by an average of 6% over the past 12 months, now more than ever, savvy travellers must find ways to manage the increasing cost of protection while still securing their peace of mind.

The Rising Cost of Travel Insurance

Recent data from Canstar’s 2024 Travel Insurance Star Ratings and Awards shows an uptick in premiums for overseas travel, with increases ranging from 5% to 7% depending on the traveller's age and family status. For instance, a single traveller now pays an average of $204 for international cover, up from $195 last year. A family of four faces an average premium of $424, an increase of $25. Older Australians, particularly those aged 62 and over, saw a 7% hike in their premiums, which now average $265 for a mature single.

These increases reflect the broader trend of rising costs across various sectors, including the travel insurance market, which isn’t immune to inflationary pressures. Despite these price hikes, the importance of travel insurance—especially for international trips—remains undeniable.

Why Are So Many Travellers Going Without Insurance?

While the benefits of travel insurance are clear, the decision to skip it is still common among Australian travellers. According to the Canstar survey, 20% of respondents chose to roll the dice and travel without insurance, potentially putting themselves at significant financial risk in the event of a medical emergency, trip cancellations, or unforeseen travel disruptions. This is a concerning trend, especially given the high cost of overseas healthcare and the unpredictability of international travel.

Among those who do opt for insurance, the timing of their purchase varies. A majority (51%) take out travel insurance when they book their holiday, while 28% secure coverage at least one month ahead of their departure. However, 9% delay their insurance purchase until the week of their trip or even after their journey has begun—an approach that can result in higher premiums or insufficient coverage.

How to Cut Costs on Travel Insurance

Despite the rise in travel insurance premiums, there are still ways for travellers to cut down on costs without sacrificing essential coverage. Canstar’s analysis of over 20,000 quotes from 53 travel insurance providers reveals that switching to a highly rated policy could save savvy travellers significant amounts. On average, consumers could save $90—or 27%—by choosing a Canstar 5-Star Rated policy over other options. Families can enjoy even greater savings, potentially cutting $136 (31%) from their premiums, while mature singles could save $78 (28%).

In addition to shopping around for the best deal, travellers can reduce their premiums by adjusting their policy details. For instance, lowering the excess or opting for a more basic level of cover can reduce upfront costs. However, this strategy comes with trade-offs, as basic plans may not cover travel delays, cancellations, or lost luggage—critical factors that can ruin a holiday.

The Importance of Travel Insurance

Canstar’s Data Insights Director, Sally Tindall, strongly emphasizes the importance of securing comprehensive travel insurance, especially for overseas trips. "When it comes to holidaying overseas, travel insurance should be the second thing you cross off your packing list after your passport," she advises. "If you need medical help overseas and you’re not in one of the 11 countries that have reciprocal health care agreements with Australia, you’ll be the one footing the bill unless you have insurance."

Some hospitals abroad may even require proof of insurance before they provide treatment or demand an upfront deposit, highlighting the critical role of insurance in safeguarding your health and finances while abroad.

For those hesitant about the cost of travel insurance, Tindall reminds travellers that the price of a single-trip policy is a small price to pay for the protection it offers. A modest upfront expense could save you from paying thousands in medical bills or trip-related costs should something go wrong.

Finding the Best Travel Insurance Policy

To help Australians navigate the complex world of travel insurance, Canstar provides a comprehensive guide to the best-rated policies. The 2024 Outstanding Value Award winners include top providers for various travel needs, such as Fast Cover, Huddle Insurance, InsureandGo, Southern Cross Travel Insurance, and World2Cover Travel Insurance.

Travellers are encouraged to use comparison tools to find policies that offer both value and adequate coverage. Canstar’s research includes detailed analysis of over 20,000 quotes from international insurers, evaluating policy features, customer support, claims processes, and application ease to ensure travellers are getting the best deal for their needs.

Conclusion

With 20% of Australians opting to travel without insurance, it’s clear that there’s a disconnect between the risks of travelling uninsured and the perceived value of travel insurance. As premiums continue to rise, it’s more important than ever to shop around and secure a policy that offers the best coverage for the best price. By comparing quotes, adjusting policy details, and choosing top-rated insurers, travellers can enjoy their holidays with the peace of mind that comes with knowing they’re protected from the unexpected.

For more information on travel insurance options and to compare policies, visit Canstar.com.au.