Travel can be a risky deal

Few of the travellers that packed Asia's beaches on Boxing Day would have envisaged a need to claim on their travel insurance policies. At worst, they may have feared falling foul of thieves.

But as the tsunami showed, you can't predict a calamity.

Thousands of travellers from around the world have made claims for everything from lost baggage, to medical claims and repatriation.

So far New Zealand's three largest travel insurers have received far fewer claims than they would have expected. Thankfully, the tragedy happened in December, a month when Kiwis tend to stay in the country.

Mike Henry Travel Insurance and IAG New Zealand have received about 60 claims between them so far, but they're expecting more.

Mike Henry Travel Insurance general manager Fiona Hewitt-Friend said many claims have been from holidaymakers caught up in the tragedy. Some lost belongings and others needed medical care.

All of the big travel insurance companies have received claims from people cancelling their holidays.

IAG received a claim from its communications chief, Shaun Hickey, who was injured in the tsunami. He was treated at three Thai hospitals and then flown back to New Zealand.

Hewitt-Friend said where Kiwis had been injured, a New Zealand-based doctor was assigned to them.

The doctor liaises with medical staff in Asia and the injured people are given hospital care of comparable quality to that in New Zealand. Where possible they are patched up and flown home

The Ministry of Foreign Affairs and Trade hasn't yet come across any Kiwis caught up in the crisis who don't have travel insurance. But it's a problem that the ministry has to face all too often. Medical costs in foreign countries can be extremely high and it does not as a rule assist financially if you run up medical bills abroad.

"If you can't afford insurance, you really can't afford to travel," said ministry consular division director Nigel Moore.

But not just any travel policy will do. Policies aren't created equal and if you don't want to be tripped up when it comes to claiming then you need to ask plenty of questions and read the fine print before handing over your money.

Don't just take the word of the sales assistant at your local travel agent. There are plenty of stings in the tail of travel insurance and one can never be too careful.

Insurance and Savings Ombudsman Karen Stevens sees claims turned down constantly because consumers have bought insurance from travel agents who just did not understand the finer detail of the policies they were selling.

When the Consumers' Institute went shopping for travel insurance and compared the policies, its researchers found that many held nasty surprises. More than half didn't cover terrorist acts and some excluded Bali because of the 2002 bombing.

Institute chief executive David Russell said: "Some policies we looked at covered [terrorism], some didn't and there were hybrids."

In the case of the Bali bombing, many insurers agreed to pay out on an ex gratia basis, said Insurance Council of New Zealand chief executive Chris Ryan.

In the UK, "acts of God" such as tsunamis are commonly excluded in travel insurance policies. But travel insurers there are paying out claims regardless through compassion, or a fear of the press. Here few policies have such an exclusion.

Even so there are other exclusions to watch out for. You need to find out if your policy covers adventure sports, or any sports at all for that matter. If you're travelling overseas for work, you should ensure business travel isn't excluded.

Southern Cross Travel Insurance automatically includes cover for white-collar work. "But if you're going to work [overseas] welding or on an oil rig, that is different," said Craig Morrison, general manager.

It also makes sense to shop around. Most of the major banks offer travel insurance, as do travel agents and even the likes of Fly Buys and The Warehouse have policies on offer. Another way to find policies is to search on Google.co.nz.

Some companies such as World Nomads and Mike Henry Travel Insurance have the full policy wording on their websites, which is a bonus. Others only describe the benefits, a practice that Russell is critical of.

If you've got a gold credit card you may find that you have travel insurance thrown in as a perk. "This has to be one of the best deals around," said Russell.

"You pay $100 a year for the card and you'd be nuts not to take advantage of it." But you should check the extent of the cover before relying on it.

Some cards only covered accidents, which did not replace fully comprehensive insurance, said Cardwatch analyst Laura Somers-Edgar.

But many cards, such as the ASB Bank Gold Card, offer cover which is the equal of travel insurance policies.

The ASB Bank Gold Card is underwritten by Southern Cross Travel Insurance. A quick comparison of the details listed on Consumers website of the ASB policy and Southern Cross' TravelCare Plan 3 show the two policies to be neck-and-neck although by no means identical.

If you're travelling abroad regularly and don't have a Gold Card, you might consider buying an annual multi-trip travel policy so that you don't need to take out insurance every time you go overseas.

Likewise backpackers often go for specialist travel insurance from companies such as Downunder, World Nomads and Columbus Direct.

Sometimes "OE" policies have cut-down cover so that they can provide equally cut-down prices. But that doesn't mean that your iPod or laptop aren't covered. When I checked the World Nomads' policy, both of these modern-day backpacking essentials were covered.

Finally, the internet has made travel insurance an awful lot easier. In many cases, you can apply for it and make claims online from the comfort of your own home or office.

Just in case the worst happens, as it has in Asia, the Ministry of Foreign Affairs has set up an online registration service so you can let local embassies know where you're travelling, where you're staying and who to contact in an emergency.