Travel Insurance v Health Insurance
There are a couple of areas that keep causing confusion in travel insurance. The first is the need to honestly disclose preexisting injuries and illnesses. A second is the need to report loss or theft to the police. I have written on each of these in the past. For example, here is a link to one on the need to report theft.
The one I want to focus on today is that under Australian legislation, travel insurers are prohibited by Australian law from paying medical expenses incurred in an insured’s country of residence, unless they are registered as a health insurance business with the Australian Prudential Regulation Authority (“APRA”).
This means that if you are travelling overseas and you become injured or ill, your travel insurer is able provide medical and hospital cover while you are overseas but once you return to Australia you need to have sufficient health insurance to provide adequate protection against ongoing medical and or hospital costs.
I stress this is the law even if the injury or illness occurred overseas.
Obviously the same applies if you are injured or become ill during a trip covered by Travel Insurance in Australia.
Naturally, travel insurers rate their coverage accordingly and are not charging for something they are not permitted to provide.
In addition to my explaining this to a number of brokers and insureds I note that the Australian Financial Complaints Authority (AFCA) has ruled on this a number of times based on the Commonwealth Government regulation.