Need to know
- A few drinks won't void your travel insurance policy, but insurers may deny claims that result from you being drunk
- How travel insurers define drunkenness can vary considerably
- If you disagree with your insurer's assessment of how the drink affected you, you can dispute their decision
For many of us, enjoying the local liquor is part of enjoying a holiday. It's as inseparable as insurance cover with loopholes. But if you have a few drinks while you're on vacation, will travel insurance still cover you? We look at how insurers apply alcohol exclusions and what you can expect.
On this page:
- Does any travel insurance cover alcohol?
- When do insurers apply the alcohol exclusion?
- How does a travel insurer define 'under the influence of alcohol'?
- How does the insurer know you're drunk?
- What to do if your travel insurer denies your claim
- Other alcohol and drug exclusions
Does any travel insurance cover alcohol?
Having a couple of drinks won't void your travel insurance cover for your whole holiday. But there is no travel insurance that will cover you for events that arise because you were under the influence of alcohol.
If you have an accident or lose some personal possessions, and the insurer thinks that occurred because you were drunk, they will probably deny your claim.
Having a couple drinks won't void your travel insurance cover for your whole holiday
The way insurers see it, they don't cover events that you could have foreseen and taken action to avoid. So for example, if a volcano affects travellers to Bali, your insurance won't cover you if you know about the volcano but don't take action to avoid being impacted by it.
If you're under the influence of alcohol, your ability to foresee events is blurred, and you may not be capable of taking the right action to avoid that event.
When do insurers apply the alcohol exclusion?
How the alcohol exclusion affects you can be as innocuous as having a few drinks at a wedding and slipping and breaking a leg, or something more sinister like having your drink spiked at a nightclub.
Here's an example provided by Smartraveller for the CHOICE travel insurance buying guide:
"Lee (not his real name) was attending a wedding in Phuket, Thailand, when he fell down some stairs at the hotel, breaking his leg and several ribs. Because he'd been celebrating with a few alcoholic drinks, his insurer refused his claim for medical expenses, citing his intoxication at the time.
"The incident cost Lee $10,300 in medical expenses, which had to be paid in full before he could leave hospital. Lee's injuries also meant he was unable to work for the next six weeks, causing further financial hardship."
How does a travel insurer define 'under the influence of alcohol'?
While all travel insurers will exclude cover for events that happen because you're drunk, how they word the exclusion varies between insurers.
Insurer World2Cover, for example, excludes "any claim arising from or related to… you being under the influence or addicted to intoxicating liquor or drugs".
For Allianz, it's when you're "...affected by any intoxicating liquor or drug to the extent that your physical, or mental functions, or your judgement are impaired".
"Under the influence" or "affected by" alcohol is a grey area, but it generally comes into play at the point where the event that caused your claim wouldn't have occurred if it weren't for you being drunk.
Even if you've had a drink, the insurer still has to prove you were drunk and that this intoxication actually caused the event that led to your claim
If you slip on a wet walkway when you're drunk, an insurer may say that if you weren't drunk, you would've had better judgement and been able to avoid that slippery walkway, or at least walked more carefully across it.
Other insurers will define a specific blood alcohol content (BAC) over which they'll exclude your claim. This gives a bit more clarity to what being under the influence actually is.
Go Insurance specifies 0.05% (the legal driving limit), regardless of whether you're driving or not, while Cover-More states 0.19%. Some people may struggle to walk in a straight line at that level of intoxication.
How does the insurer know you're drunk?
You may find a clause in your travel insurance policy that obliges you to agree to a blood alcohol or breath analysis. So if the insurer suspects you've had some drinks, they may get you to take a test before they agree to cover your claim.
If insurers don't get their hands on a BAC test, they may use other methods to estimate your BAC in order to decline your claim. In a case published earlier this year, Cover-More estimated a BAC based on the policyholder's weight and the drinks on their bar bill.
Video: CHOICE calls for more transparency about alcohol exclusions in travel insurance.
What to do if your travel insurer denies your claim
If your travel insurer denies your claim because they reckon you had too much to drink, but you disagree with them, the first step is to lodge an internal dispute with your insurer. Check the insurer's website or product disclosure statement (PDS) for their official complaints procedure and contact (usually an email address).
If the insurer still denies your claim after you lodge a dispute with them, you can raise a dispute with the independent ombudsman, the Australian Financial Complaints Authority (AFCA).
Even if you've had a drink, the insurer still has to prove you were drunk and that this intoxication actually caused the event that led to your claim.
If the insurer still denies your claim after you lodge a dispute with them, you can raise a dispute with AFCA
A ruling by the Financial Ombudsman Service, AFCA's predecessor (this was a while ago but we cling onto cases where the insurer lost), found that an insurer was not able to rely on the exclusion to deny a claim for a woman who left a backpack in a taxi after a couple of drinks:
"...she [admits to] consuming a number of drinks on the evening but was not under the influence nor did the loss arise directly or indirectly from the influence of alcohol. Other than this statement, there is no evidence regarding the influence of alcohol.
"The Applicant claims the backpack was left in the cab in the confusion of trying to settle the cab fare whilst at the same time keeping an eye on children. There is no evidence to contradict this.
"The evidence is not sufficient to establish that the loss arose directly or indirectly from the influence of alcohol."
Other alcohol and drug exclusions
Search your PDS for the alcohol or liquor clause to understand how your claims might be limited. And while you're there, check the full list of general exclusions. It's a sobering read.
Another exclusion you'll come across is for claims that relate to the treatment of alcoholism, drug addiction or substance addiction. This may mean your visit to a rehabilitation clinic, but it can also extend to other people.
For example, if you want to interrupt your holiday to travel home to visit a sick relative, the insurer may deny your claim if your relative is sick due to chronic use of alcohol or drugs.
Stock images: Getty, unless otherwise stated.
