If you're going overseas, international travel insurance is a must, but do you need cover for an Aussie vacation? There's no shortage of events that can disrupt your local holiday as bushfires and COVID have shown us in recent years.
We look at what is, and isn't, covered by domestic travel insurance in Australia.
Is it worth getting domestic travel insurance?
If you've paid a lot for your Aussie holiday, are hiring a rental car, or travelling with sporting equipment, you can get good value out of domestic travel insurance. But, if you've scored a budget airfare and cheap accommodation, you might be better off claiming what you can from the airline and accommodation provider.
How much does domestic travel insurance cost?
Domestic travel insurance costs on average $82 for a single person travelling seven days in Australia, or $158 for a family where all members are less than 60 years old. For a couple who are both less than 60 the average rate is $143.
Below is the average price and range from cheapest to most expensive for people travelling in Australia for seven days.
| Travellers | Average | Range |
| Single (all) | $105 | $7–641 |
| Single (under 60) | $82 | $7–458 |
| Single (60+) | $147 | $7–641 |
| Family (all) | $160 | $9–738 |
| Couple (all) | $213 | $14–1093 |
| Couple (under 60) | $143 | $14–490 |
| Couple (in 60s) | $211 | $14–670 |
| Couple (over 70) | $363 | $20–1093 |
Natural disaster cover
Most insurers cover cancellation and amendment claims resulting from natural disasters for both international and domestic travel insurance. The exceptions are Insure and Go and Tick, which offer it as an optional extra, and lower-level policies that cover baggage only. Cover will vary significantly, so check with your insurer to determine if you're eligible to claim.
Flight cancellation cover
Flight delays and cancellations have steadied since the peaks experienced during the height of the COVID-19 disruption but are still more volatile than before the pandemic. In 2019 the domestic cancellation rate was 2.5% compared to 5% in December 2023.
If the cancellation or delay is the airline's fault, domestic airlines do give a set compensation for travel, accommodation and meals
Unfortunately, travel insurance doesn't always cover cancellations and delays. It all depends on what caused them. If they're not the travel provider's fault, such as a natural disaster, then travel insurance covers them more often than not. But if it's a cancellation caused by the transport provider, such as your airline, the majority of travel insurers don't cover these cancellations, unless they're the result of a strike.
If the cancellation or delay is the airline's fault, domestic airlines do give a set compensation for travel, accommodation and meals. Just don't wait for them to give it to you – you'll need to research the conditions of carriage and quote them back to the airline.
The usual exclusions
If you regularly travel internationally, you'll find domestic travel insurance contains many of the usual exclusions. Chief among them are existing medical conditions. If you need to shorten or even cancel your holiday because of such a condition, travel insurance will often exclude it, unless you declared it in advance and possibly paid an extra premium. The same goes for age limits – insurers may raise premiums or cut off cover altogether as you get older.
Rental car cover
Domestic travel insurance policies usually contain cover for hire-car excess. Hire-car companies charge about $40–70 a day to reduce your standard liability, so domestic travel insurance can be an affordable alternative that covers more than just your car hire. That said, there are a few things to bear in mind:
- If you're in an accident in your rental car, you'll probably have to pay the car-hire company for the damages upfront, and then claim them back from your insurer.
- Anyone who is driving the rental car will need to be named as a policyholder on your travel insurance to ensure they are covered.
- The exclusions in the car-hire contract usually still apply. For example, if your rental contract excludes windscreen cover, your travel insurance is unlikely to cover it.
If you're concerned, a standalone car-rental excess policy may give you broader cover.
Cruise cover
Domestic travel insurance generally won't cover you for medical expenses while travelling in Australia, as they should be covered by Medicare or your health fund. Medical evacuation may be covered by the ambulance scheme in your state, or your private health insurance.
If you book a cruise in Australian waters, you'll probably need travel insurance with medical cover, as Medicare might not cover shipboard medical expenses
If you book a cruise in Australian waters, however, you'll probably need travel insurance with medical cover, as Medicare might not cover shipboard medical expenses. You may need international or cruise-specific insurance – standard health insurance won't cut it and nor will many domestic travel insurance policies.
Baggage cover
Domestic travel insurance will cover your baggage, with the exception of some 'cancellation only' policies. But before you let your policy choice hinge on the baggage cover, it's worth checking that you don't already have 'portable contents' cover for specified items under your home contents insurance. If you want to cover an expensive item you regularly leave home with, such as a smartphone, laptop or camera, you might want to make sure you're covered all the time.
Also, travel insurance policies usually have an exclusion saying they won't cover you if you're already covered by another insurance policy. The 'other insurance' clause is common in all insurance.
Sports equipment
If you're taking something that only leaves home for holidays, such as a surfboard or skiing gear, you may be able to get specific cover with your domestic travel insurance. Watch out for tricky insurance policy loopholes though, such as losses excluded for theft or damage to watercraft.
Several policies also have optional cover for snow sports and golf equipment, including green fees if you have to cancel.
Liability cover
Domestic travel insurance will generally cover you if you become legally liable for accidentally injuring someone, or damaging or losing someone's property. But your home contents insurance will also cover you for this, and domestic travel insurance will exclude liabilities that your other insurance policies cover.
Stock images: Getty, unless otherwise stated.
