Unless your entire New Zealand holiday consists of a weekend at nana’s, you’ve probably sunk a lot of time and money into planning your trip. But even the smallest thing could ruin your plans: getting sick before you go, losing your luggage in transit, having your flights cancelled – and cost you a lot to boot. Getting domestic travel insurance can help give you peace of mind so you can relax knowing that you’ll be covered when you hit the road.
Compare domestic travel insurance
Why do you need domestic travel insurance?
If you think back to every holiday you’ve ever been on, you can probably point to something that didn’t go as planned.
Your flight was double booked. Your kid came down with the flu mid-trip. Some knucklehead drove off after backing into your parked rental car.
Situations like these have knock-on effects that eat into your hard-earned cash. Domestic travel insurance can help you out when you’re in a pickle. Consider these examples:
The airline damages your skis. Ski equipment is expensive. Most insurers offer ski policies that will cover your equipment and reimburse you for unused lift passes if something goes wrong. There are similar policies for golfers, too.
Your shopping holiday turns sour when a thief swipes your bags. Theft cover is a common feature in most policies, protecting both your money and belongings.
You have to cancel your trip but you’ve already pre-paid for loads of activities. Your insurer will reimburse you for pre-booked activities if you have a good reason for missing them. For example, if illness causes you to cancel your trip; if the activity provider goes bust; or if a delayed flight holds you back.
You get sick on a domestic cruise. Won’t private health insurance help? Not necessarily. Unless there’s an approved doctor on board your domestic cruise (it’s not required that there be one), you’re responsible for your treatment costs. If it’s serious, it can cost thousands of dollars…it’s best to avoid the drama by taking out travel insurance.
You’re headed to a wedding and your flight gets cancelled. In most cases, the airline is responsible for rebooking the cancelled flights (often taking their sweet time in the process). But if you’re about to miss a very important event, some insurance policies will let you make your own last-minute arrangements and reimburse you later.
You’re headed to a festival but the airline loses your luggage. A good policy will give you a daily allowance for necessities until you get your luggage back. And if it never arrives? The right policy will replace it all, including all those chic festival outfits.
Local hooligans key your rental car. Without insurance, your rental car excess could be as much as $3,000 or more. Domestic travel insurance can reduce this to much more manageable levels. Of course, you could get car rental excess insurance from the rental company. But only if you want to pay more and lose out on all the other benefits of your travel policy. See how it compares below.
What does a typical policy cover?
Most domestic travel insurance policies cover similar situations, although you will find some differences including price, benefit limits and whether certain benefits are automatically included or offered as add-ons.
Shouldn’t I just get car rental excess insurance?
Sure you could get car rental excess insurance by itself, but that will only cover your rental car, and the cost is often much higher. Have a read of the case study to see what can happen if you neglect to take out domestic travel insurance.
Greg doesn't get travel insurance for a roadtrip
Greg and his wife Gwen decided to take a road trip from Auckland to Wellington for the long weekend. Instead of taking their boring old hatchback for the trip, they rented a luxury vehicle from a rental car company to add some fun to their one-week journey.
A day before they left, Greg considered taking out a domestic travel insurance policy for $47. As well as cover for personal liability, cancellation fees and more, the policy would have provided $6,000 cover for rental vehicle insurance excess. Unfortunately, Greg forgot to purchase cover.
When Greg picked up the rental car, the rental company offered the option of purchasing a car rental excess reduction for $25 a day. The cost was quoted $175 in total, to reduce the excess payable in the case of an accident from $3,000 to $100. Greg was keen to pinch his pennies and chose not to purchase cover.
So when Greg failed to check his mirror and reversed into a Mini in the carpark of a fast food restaurant, he knew he’d made a big mistake. Not only did he break a tail light on the rental, Greg also dented the bumper and significantly scratched the paintwork. Without domestic travel insurance cover in place or even the rental company’s excess reduction waiver, he had to pay the standard insurance excess of $3,000.
Cost of damage done to vehicle: $1,900 Insurance excess Greg must pay: $3,000
Cost of domestic travel insurance: $47 Amount Greg could have saved had he taken out cover: $2,953
How else can a domestic policy help?
The benefits of a domestic policy don’t end there. Many policies also offer the following benefits as standard:
If you have to cut your trip short. If a major incident makes you cut your trip short (e.g. you get injured, someone close to you is hospitalised, your home is destroyed), you could be reimbursed the cost of getting back home and even the cost of resuming your trip after you’ve taken care of business.
If an injury you received from travelling continues to impact your life. ACC andhealth insurance will take care of the injury. But what about everything else? The right policy will help with loss of income and disability, and may even pay your family a benefit if you die while travelling.
You accidentally hurt someone or damage something. Most policies have legal liability protection that will kick in if you’ve unintentionally damaged someone or something.What does a domestic policy normally cover?
What’s not normally covered under your policy?
So far, so good. Now that you got what you need, let’s make sure you don’t void your cover. All insurers will provide you a list of circumstances that will void your claims. These are called exclusions. Here are some you may encounter:
You didn’t disclose a pre-existing condition. You’ll be denied for claims related to pre-existing conditions unless your insurer approved it ahead of time. If you have an ailment, tell the insurer before signing on the dotted line.
You were careless with your belongings. Don’t leave your stuff unattended. If it’s stolen, the insurer won’t replace it.
You acted recklessly. Say goodbye to your claim if you’re drunk or high, or if you break the law.
You ignored medical advice. If the doctor says don’t travel, you should probably listen. It’s dangerous to your health and your claim.
The cheapest cost of a week-long domestic trip on finder for a 35-year-old is around $28*, or around 4 dollars a day. For the price of a cup of coffee, you get covered for a whole lot, including $5,000 in rental car excess insurance, unlimited cancellation cover, $5 million in personal liability and $25,000 for accidental death cover. You can probably find an even cheaper policy, but it won’t cover as much.
What affects the price?
The length of your trip
How many people need cover
Those people’s ages
Whether or not you add optional cover like ski cover, cruise cover or rental car excess insurance
If you decide to cover a pre-existing condition that isn’t included in the standard policy
*This price was for a 7-day trip on 20 April 2019 and including rental car excess cover.
How to save money on your policy
Some say that if you can’t afford travel insurance, you can’t afford to travel. That sentiment may ring true, but that doesn’t mean you should pay more than you need to for the appropriate policy. You might be surprised at how affordable domestic travel insurance can be. All it takes is for you to carefully consider your travel needs and then to compare your options accordingly.
Here are a few simple ways you can reduce your domestic travel insurance premium:
Buy a bare-bones policy. Some insurers offer budget policies that only cover you for the most costly risks, like needing to cancel your trip or cut it short due to an emergency. Obviously you won’t be covered for as much, but if you’re looking to save, this is the easiest way to do it.
Increase your excess. You can reduce your premium by agreeing to pay a higher excess on your claims. Just don’t increase your excess to a level you’d have a hard time paying.
Bargain shop. Insurers often run special promotions. If you look hard enough, you’ll find coupon codes, giveaways and loyalty incentives.
Buy a joint policy. Many insurers will give you a discount if you and your travelling companion (be it friend or partner) take out a policy together. You’ll each receive full benefits in most cases.
Don’t add options you don’t need. Some people need extra cover, especially if their trip involves expensive hobbies like skiing. But if your flights and activities didn’t cost much, you can go with a more no-frills policy instead.
Shop around. It definitely pays to weigh your options. Once you’ve determined what you need, comparing policies becomes much easier. Review your options carefully and pay attention to each policy’s features, limitations and exclusions.
Is it worth it for domestic flights?
Flights in and around New Zealand can often be quite affordable, so it’s tempting to assume it’s worth the risk to travel uninsured. To test this out, let’s take a look at a case study.
Sarah is due to fly from Auckland to Christchurch for a two-week holiday, but just before she leaves, she breaks her leg and is forced to cancel her trip. Under normal circumstances, she’d be out the $160 she paid for her non-refundable round-trip ticket.
Luckily she had the foresight to purchase a domestic travel insurance policy for less than three dollars a day, and this entitled her to a full refund of the $160 fare. That’s a $120 net gain. Not too shabby!
To top it off, Sarah’s policy would have also covered a host of other cancellation fees and lost deposits had she also booked those. These include:
Rental car hire
So all of that would be refunded too.
How does travel insurance compare to the cover offered by my airline?
You may be aware of the fact that when you book flights for your holiday, you also have the option of purchasing travel insurance from your airline. However, airline travel insurance policies typically tend to offer a much lower level of cover than policies purchased direct from insurers.
Airlines do have the option to purchase travel insurance through them. However, the level of coverage is noticeably different when taking out an independent domestic travel insurance policy.
What will I actually be paid if my trip is cancelled?
Domestic travel insurance offers a cancellation cover to cover a range of pre-booked expenses in the event that you need to cancel your trip due to unforeseen circumstances.
What cancellations will you usually be covered for?
Pre-paid meal expenses
Cancellation for flights and accommodation
Under what circumstances can a trip be cancelled?
Unforeseeable death, injury or illness of relative that resides in New Zealand
You have to go to court or have compulsory jury duty
Accident in the vehicle you were planning to use on a trip before you planned to travel
You are a member of the armed forces, police, fire, nursing or ambulance services and are required for duty
You are made redundant, provided you are eligible for redundancy payments as defined under current law
You need to stay home due to flood, fire, storm or burglary in your place of residence a certain period of time before you planned to leave
Traps to watch out for when choosing a domestic policy
Every year there are stories of people left devastated after learning their domestic travel insurance policy was unable to provide a benefit for their claim because it fell outside of what was covered in their policy. Be wary of these traps and pitfalls when searching for domestic travel insurance to cover your next New Zealand holiday:
Underinsurance. Cost is always a consideration when buying travel insurance but looking to cut costs at every turn can lead you into trouble. Underinsurance could have significant financial consequences if something goes wrong on your trip, so make sure any policy you choose provides sufficient cover.
Choosing the cheapest policy. While it is important to find a competitively priced policy, basing your purchase purely on price may leave you drastically under-protected. Research the policy features on offer and know what you are covered for. Cheaper cover will often have higher excess charges and greatly reduced benefit levels.
Buying cover from an airline or travel agent. Buying travel insurance through an airline or travel agent when you book your holiday may be convenient, but it’s also usually unnecessarily expensive. Many airlines and travel agents add substantial commissions on top of the policy price, so you can save a lot of money if you buy cover directly from an insurer instead.
Not reading the fine print. A travel insurance PDS is not what you’d call an entertaining read, but it is something you should examine closely before buying a policy. Look at the benefits, cover limits and exclusions to ensure that you know exactly what your policy does and does not cover.
Per-item limits. It is crucial to know the conditions for payments for lost luggage and expensive items. While the policy may state “up to $5,000 cover for lost items”, there may only be a benefit of $600 per item provided. These sub-limits are often applied to expensive items.
Cover for the activities you plan to do on your trip. If you are participating in particular sports or activities on your trip it is important to find out whether or not they will be covered.
I travel often – should I get an annual multi-trip policy?
Searching for annual travel insurance to cover your trips within New Zealand? If you’re a frequent traveller, purchasing an annual multi-trip policy can be much more cost-effective than buying a separate policy for each trip you take.
Annual multi-trip domestic travel insurance provides cover for all the holidays you embark upon within New Zealand across a 12-month period. There’s usually a maximum limit on the length of each individual trip, but otherwise these policies provide all the benefits you would expect in an ordinary travel insurance policy.
What are the benefits of taking out an annual policy? An annual policy can offer both convenience and great savings, as you will only need to apply for cover once and have the peace of mind that you are covered for all domestic journeys you take in any 12-month period. This option can be much cheaper than applying for multiple policies over the course of a year.
Who should consider an annual domestic travel insurance policy? An annual policy is only really suitable for people that travel 3 or more times per year. If you only need cover for 1-2 trips, it is probably more cost-effective for you to take out a single-trip policy. Most insurers will not provide annual policies to travellers over 60 years of age, as they need to assess any health risks that they may present. Annual policies are also a great option for people that need to travel last minute for business.
Can I get an annual policy to cover both international and domestic trips? Yes, it is possible to get an annual policy that will cover both trips within New Zealand and trips overseas. This could be a good option if you’re looking to take a cruise trip but stopping off at New Zealand ports, your work sees you regularly travel both interstate and abroad or if you just love to get away both within New Zealand and overseas. It is important to note that not all insurers will cover both domestic and international trips so make sure you check the terms and conditions.
How can I get insurance for my caravan holiday?
Planning a New Zealand holiday with your caravan in tow? If so, you obviously won’t need the cover for flight cancellation costs provided by domestic travel insurance, so is it worth your while purchasing a policy?
The answer really depends on what you have planned for your holiday. If you’ve pre-booked a lot of your holiday expenses – caravan sites, tours, ferry tickets (eg Interislander) etc – cancellation cover can still be useful. Other benefits, such as cover for theft, stolen or damaged personal items and trip disruption costs, could also come in handy, so it’s up to you to decide whether you need cover.
At the time of writing, there are no New Zealand insurers that offer a custom caravan holiday insurance product. Because of this, it’s also important to examine the cover provided by your caravan insurance policy. Comprehensive caravan insurance covers loss or damage caused by accidents, fire, storm, theft, malicious damage and more, so it’s worth reviewing your cover before hitting the road.
How to choose domestic travel insurance
How can you find the right domestic travel insurance policy at the right price? Follow a few simple steps:
Think about the cover you need. Do you want cover for the essentials only or ultimate peace of mind? Do you need to add any optional extras, such as cover for adventure sports or high-value personal items?
Consider your budget. How much do you want to pay for cover? Can you vary your excess to lower your premium, or take advantage of any other discounts available?
Get quotes. Once you have a better idea about the level of cover you want, obtain quotes from multiple insurers. This will help you work out how much cover costs and which insurers can help you save money.
Compare policies. Take a closer look at the benefits, limits and exclusions of any policy you are considering. This will allow you to work out which policy provides the best value for money and is the best choice for your New Zealand holiday.
What if I’m not an New Zealand resident?
Not from around here? No worries. With so many non-permanent residents joining our friendly communities all around New Zealand, there are travel insurance plans available for non-residents of New Zealand to make sure that you too are protected for everything you need for the entire duration of your visa.
While the exact eligibility requirements for a non-resident travel insurance policy will depend on your chosen insurance provider, most insurers allow travel insurance within New Zealand for non-residents if you are planning to spend the majority of your trip within New Zealand.
If you are already living within New Zealand, you may be required to show proof that you have private health insurance cover in place.
Do you need domestic travel insurance for New Zeland cruises?
It might sound counterintuitive, but you’ll want to get international travel insurance if you are cruising domestically. That’s because domestic cruises are a kind of healthcare Twilight Zone: domestic travel insurance won’t help because it isn’t built to offer medical cover.
Most insurers will slot their domestic cruise insurance in with their international policies since the cover looks more like international policies than domestic ones. Regardless of how they categorise it, you need to be clear with your insurer about where you are cruising and confirm that medical cover is included.
How to find the best domestic travel insurance
The best domestic travel insurance policy is the one that offers high benefit limits for the situations that matter most to you, and that also cover you for a wider variety of situations.
Here are some ways you can identify which policy is the best one for you:
What are the benefit limits? A benefit limit is the maximum amount of money you can be repaid for any specific area of cover. For many travellers, the most important areas of cover will be trip cancellation and lost luggage. Look for policies with unlimited cancellation cover and enough lost luggage cover to replace all of your luggage and personal belongings if someone stole them or the airline lost them.
Are you going to a wedding or other special event? If a transportation delay will cause you to miss a special event (such as a wedding, funeral or 50th wedding anniversary), the best policy will pay you to make last-minute arrangements to be there on time. Other policies might pay you back for some of the money you spent on the event if you miss it, but they won’t do anything to get you there on time.
Do they give you separate benefit limits for seperate areas of cover? The best policies will structure it this way, whereas average policies will offer you one benefit limit for multiple areas of cover. For example, the emergency expenses benefit covers you if you suddenly become ill on your trip and you need to come home or spend extra on emergency accommodation. However, some policies bundle this together with trip cancellation cover, meaning you don’t actually have as much trip cancellation cover as you originally thought.
Are you renting a car? If you take out car insurance on your rental car, your out-of-pocket expenses (or your excess) can run into the thousands of dollars if you cause an accident. Rental car excess insurance will help you pay for that. Most policies offer this, but the best policy will be the one that offers you the highest limit – especially if you’ll be driving a lot.
Does it automatically cover special activities? Many policies will make you pay extra if you want to be covered for riskier activities like skiing, motorcycle riding and cruising. If you will be doing any of these activities, the best policy will cover them automatically or at very little extra cost.
Are there any other perks? If you truly want the most comprehensive policy you can get your hands on, keep your eye out for a few other benefits that you’ll only find on certain policies. Most policies won’t cover you if your money is stolen, if your personal documents are destroyed or if you experience a few extra expenses because of a late flight. However, some of the best policies will offer these extra benefits.
Does the cost of insurance change based on where you travel in New Zealand?
No. Most insurers charge exactly the same no matter where you are travelling in New Zealand. This is good news for those flying within the country or staying somewhere fancy, because it means you won’t be paying any extra even if your trip costs more. Even those travelling to remote locations will pay the same as they would if they were going anywhere else.
If you are going to the ski slopes, you have the option to buy additional ski cover that will cover you for bad weather, gear rental excess and lost/stolen equipment related to skiing. But this extra cost is not based on where you’re travelling. It’s based on what activities you will be doing.
Common questions when it comes to domestic cover
A. You might already be covered by private health insurance but what about cover for cancelled flights, lost luggage, car rental excess charges? These are just some of the things a domestic policy can cover. With a two-week domestic policy starting at as little as $40*, it’s a little expense for great peace of mind.
A. Yes. Most insurers will cover you if over 70 years of age. In some cases you may be required to submit details of your medical history in order to take out cover.
A. Yes. You can contact your insurer while the policy is still active to request an extension. You may be required to provide reasoning for extension of your policy.
A. This may vary between providers though generally claims can be settled within 10 days of the claim being made. In some cases the insurer may request further information, which may delay the claim further.
A. Yes. Provided it is within the required timeframe (usually between 30-60 days). That said, it is usually much less hassle if you just contact the insurer immediately so you know if you need to provide any further evidence.
A. Some home and contents insurance policies will provide you with cover for lost items even if you are travelling within New Zealand. If this is the case, your Home and Contents insurer may be liable to pay a portion of the claim.
A. In most cases yes. Most insurers will require you to be at least 200km from your place of residence for your domestic policy to apply.
A. Trip cancellation for work reasons may be covered in the event of retrenchment or if you are required to work because you are part of an emergency service i.e. defence forces or fire-fighter.
A. You will not be covered by private health insurance for any medical related losses while at sea, even if travelling between New Zealand ports so it’s definitely worth taking out an international policy.
Depending on the card, you are covered for cancellation of domestic travel arrangements if you must cancel for reasons outside of your control. Reasons include:
If you, or a relative passes away, becomes seriously injured or becomes seriously ill
You are quarantined
Participating cardholder or spouse is unexpectedly retrenched
What you need to be aware of:
Travel arrangements must be booked using the credit card
A minimum spend on travel arrangements with card is required for cover to be activated
The excess tends to be higher than standalone policies with no option to remove the excess charge. The excess may end up being more than the price of your flight!
Personal computers, electronic equipment, jewellery or watches checked-in as luggage is usually not covered
Cover is usually not provided for business-related trips
No, this is where it is important to consider travel insurance
If your flight is delayed or cancelled by the airline, they will attempt to rebook you on the next available flight on their services at no extra cost.
Alternatively, if the airline is unable to rebook you on the next flight, the applicable fare will be refunded.
The airline will not be responsible for any additional cost that you incur as a result of cancellation. This is where travel insurance comes in.
Most policies will cover additional meals and accommodation expenses following trip delay if your journey is disrupted due to reasons beyond your control
No. Domestic travel insurance does not include medical cover, and is completely unrelated to any medical care you receive in New Zealand.
*$40 quote price based on 27-year old traveller going to Queenstown for 7 days on the 13 May 2019. Prices are indicative only and subject to change based on your individual details.
Richard Laycock is Finder's insurance editor and has been wrangling insurance product disclosure statements for over five years. His musings on insurance can be found across the web including on MoneyMag, Yahoo Finance and Travel Weekly. When he’s not helping people make sense of insurance fine print, he is testing the quality of cocktails in his newfound home of New York. Richard studied Media at Macquarie University and The Missouri School of Journalism and has a Tier 1 Certification in General Advice for Life Insurance.
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