"My advice would be to make sure you fully understand exactly what you're covered for before you leave the country, and make sure that you've got sufficient cover for the length of your travel, and any other circumstances that you think you might need to claim on it."
The company dealt with 47 complaints against insurers in the last year - almost two thirds of which concerned travel insurance claims which were declined.
Ms Taylor said most of those complaints were not upheld because the wording of the policy had to be adhered to.
"If the circumstances unfortunately don't fit within the policy, then we can't uphold the complaint."
Some of the most common complaints were about baggage or items which were lost while unsupervised.
Ms Taylor said there was a fine line about what was covered under some policies - such as leaving belongings under a towel at a beach or accidentally leaving a wallet or camera in a taxi or cafe.
Insurance Council chief executive Chris Ryan said travellers needed to be sure about what they were covered for - and that meant asking their insurance broker or travel agent to clarify anything that was unclear.
"The sad thing about travel insurance is the consequences of not being covered can be quite serious because the costs overseas can be very high, particularly relating to health but equally to other issues that can happen," he said.
"The things that happen are also quite unusual, whether it be lost luggage or cancelled flights or even, most recently, the issue of whether you're covered for high-risk activities like riding motor scooters or mopeds in foreign countries."
One traveller who found out the hard way was Hawkes Bay man Sean Kenzie, who suffered extensive life-threatening injuries in a scooter accident in Thailand earlier this year.
The 27-year-old thought he was fully covered by his insurance, but failed to read the fine print which did not include riding scooters.
He ended up stranded in a Thai hospital for a month before donors stumped up tens of thousands of dollars to cover his medical expenses and a flight home.
Mr Ryan said a lot of travellers took part in activities they usually would not do in New Zealand - such as riding scooters without a licence, skydiving or mountain climbing.
"A lot of those high-risk things have not been covered for a long time, so there's really an obligation on people selling it to tell them."
Mr Ryan said 97 per cent of legitimate claims were paid out, which was why people continued to buy insurance.
