Table of Contents
Featured Partners
1
Fast Cover Travel Insurance
Medical cover
Unlimited, 24/7 Emergency Assistance
Cancellations
Unlimited, (Trip Disruption $50,000)
Key Features
25-Day Cooling Off Period, Australian Based Call Centre, 4.6 Star Product Review Rating
2
Cover-More Travel Insurance
Medical cover
Unlimited, with a $2000 limit to dental
Cancellations
Yes, amount chosen by customer
3
Southern Cross Travel Insurance
Medical Cover
Including medical treatment, doctors’ visits, prescribed medication, specialist treatment & medical transport costs
Cancellations
$2,500 with option to increase to unlimited
Domestic travel in Australia has rebounded far quicker than the gradual recovery in international travel as the sector recovers from shutdown during the pandemic. Unfortunately, this has been accompanied by high levels of disruption in the local travel market.
Travellers have increasingly faced surging airfares, frequent flight delays and misplaced luggage in the past year, as the sector struggles to cope with the spike in demand. Other disruptions include labour shortages and extreme weather events.
In February 2023, major airlines in Australia averaged a little over 70% for on-time arrivals and departures, and had a 3.9% cancellation rate, according to data from the Bureau of Infrastructure and Transport Research Economics. This was significantly lower than the long term average of around 82% for on-time arrivals and departures and 2.1% for cancellations.
This is prompting more and more Australians to turn their mind towards insurance for domestic travel. A recent survey by insurance provider InsureandGo found two-thirds of respondents willing to take out travel insurance this year to safeguard their domestic trips.
“Last year, many travellers were let down by the frequency of cancelled or delayed flights, ongoing flooding and natural disasters as well as patterns of lost or delayed luggage,” InsureandGo Chief Commercial Officer Jonathan Etkind said.
“As risks of personal financial losses increased, our survey shows last year’s logistical problems are still at the top of mind for many travellers.”
What Does Domestic Travel Insurance Typically Cover?
Travel insurance helps to cover the financial cost of something going wrong during a trip. What a travel insurance policy actually covers will depend on the level of cover that is purchased. Generally, domestic travel insurance in Australia can cover:
- the costs of delays and cancellations for flights, tours, accommodation or other activities that are not being refunded by the service providers
- lost, damaged or stolen belongings and personal items such as luggage, cameras, phones, etc.
- costs related to delay or cancellation of transport including for payment of rental car excess.
According to a recent survey by insurance provider Southern Cross Travel Insurance, the most common issues faced by domestic travellers include lost luggage, flight delays or cancellations; travel disruption caused by an illness; and Covid-19-related travel disruption.
Related: Guide to Understanding Travel Insurance
Does Australian Travel Insurance Cover Covid-19?
Most domestic travel insurance policies do not provide cover for medical expenses because Australian residents are either covered by our national Medicare system or their own private health insurance policy.
However, a number of policies do cover non-medical expenses related to Covid-19, such as a trip or an activity being postponed or cancelled due to a positive test result or a pandemic-related disruption. Some policies also provide cover if pre-paid accommodation is closed due to a Covid-19 outbreak.
Nonetheless, there is no default or blanket coverage for Covid-19 related events, so it is important to read the Product Disclosure Statement (PDS) carefully before purchasing domestic travel insurance.
Do I Need Domestic Travel Insurance?
Australians have often been sceptical of taking out insurance for domestic travel because of the availability of free healthcare and the reliability of local travel services. But as unexpected disruptions have increased—particularly during peak holiday seasons—more travellers are seeing value in insuring domestic trips.
“Domestic travel insurance is something many Australians often neglect to consider when they travel, but our research shows that 58% of Australians experienced travel disruptions domestically in 2022,” says CEO at Southern Cross Travel Insurance, Jo McCauley.
“With the cost of travel becoming increasingly expensive it’s something we’re urging Aussies to consider as a standard travel expense, which protects you from the unexpected.”
Generally, risks are higher the longer the duration and the more expensive the trip. Most commonly, travellers benefit in instances such as an unexpected illness that may result in a cancellation, or luggage being lost, stolen or damaged when travellers experience transport delays and cancellations.
But domestic travel insurance can also prove useful in cases of unpredictable extreme weather events that cost hundreds of dollars in rental vehicle damage or accommodation or transport cancellations, InsureandGo’s Etkind says.
“Those travelling to regional areas during heavy rain or bushfire seasons could also seek coverage for natural disasters as an addition on their domestic policy,” he said.
Related: Cover-More Travel Insurance Review
How Much Does it Cost?
Prices depend upon a variety of factors, including the destination, the age of the travellers, whether they have any pre-existing medical conditions and the duration of the trip. They also vary based on the provider and the level of cover taken.
Domestic travel insurance can also prove useful in cases of unpredictable extreme weather events that cost hundreds of dollars in rental vehicle damage or accommodation or transport cancellations
For instance, a basic policy from InsureandGo for a 30-year-old on a five-day domestic trip can be purchased from $37.
Similarly, travel insurance for a family of four—two 40-year old adults and two children—on a week-long trip is available for $139 from Southern Cross.
Which is the Best Company for Travel Insurance?
As with other types of general insurance, the travel insurance market is quite competitive in Australia. Some of the larger players offering domestic travel insurance include:
Most of the alternatives provide various levels of cover and a number of add-ons and each of them comes with a number of pros and cons. For example, some policies provide higher medical cover but may limit what activities are covered, others may be more suitable for families, and so on.
What policy is suitable depends largely on individual requirements and the inherent risks of the destination.
Related: Pros and Cons of Travel Insurance Saver
Featured Partners
1
Fast Cover Travel Insurance
Medical cover
Unlimited, 24/7 Emergency Assistance
Cancellations
Unlimited, (Trip Disruption $50,000)
Key Features
25-Day Cooling Off Period, Australian Based Call Centre, 4.6 Star Product Review Rating
2
Cover-More Travel Insurance
Medical cover
Unlimited, with a $2000 limit to dental
Cancellations
Yes, amount chosen by customer
3
Southern Cross Travel Insurance
Medical Cover
Including medical treatment, doctors’ visits, prescribed medication, specialist treatment & medical transport costs
Cancellations
$2,500 with option to increase to unlimited
Frequently Asked Questions (FAQs)
What is domestic travel insurance?
Domestic travel insurance gives protection from the financial cost of unexpected incidents or accidents while travelling within Australia. Generally, this policy will cover the cost of delays and cancellations, lost or damaged luggage, and so on.
What is the best domestic travel insurance in Australia?
There is no single ‘best’ policy when it comes to domestic travel insurance. The suitability and cost is determined by the destination, the duration of the trip, the age of the traveller, and the level of coverage.
Do I need travel insurance to travel within Australia?
Domestic travel insurance generally does not cover medical expenses because Australian residents are covered by the national Medicare system or their own private health insurance. However, it is a good idea to take out this type of insurance to cover the risk of lost luggage and flight cancellations.
