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Disrupted … passengers in Perth attempt to rebook flights after the Chilean volcanic ash cloud disrupted travel earlier this year.Photo: AFP Here are 10 things you need to know about travel insurance before you buy. Let me count the ways you could have needed your travel insurance this year: Cyclone Yasi in Queensland, Hurricane Irene in the US and flooding in Thailand; volcanic eruptions in Iceland and Chile; earthquakes in Christchurch and Turkey; the tsunami and nuclear emergency in Japan; civil unrest in Egypt and Libya, protests in Europe, plus disruptions to Tiger Airways and Qantas flights. These opportunities for cancellation or travel interruption came on top of the more ”run of the mill” holiday woes, ranging from illness and lost luggage through to stolen cameras. But not every traveller who turned to their insurer in the past year will have been happy with the response. Advertisement: Story continues below While the rate of complaint about travel policies has declined markedly in recent years, it still accounts for about 10 per cent of all complaints to the Financial Ombudsman Service. Often these disputes arise because people don’t realise the limitations on their policy, either because they have bought in haste while concentrating on other details of their trip, or because the policy wasn’t clear. To make sure you buy a policy that stands up when it’s needed, here are 10 things you need to know about travel insurance. Price isn’t everythingAs with any insurance, there’s no point paying for a policy that’s cheap only because it’s riddled with limits and exclusions that make it hard for a claim to succeed. The premium might be low because there’s a big ”excess” - the loss you’ll have to bear before the insurance kicks in - or because its benefits cut out quickly. Read the policyIt’s tempting to just scan the summary that sets out the key features and headline figures for benefits but you should read the full product disclosure statement to check the detail. You might discover, for instance, that while there’s $5000 available for lost luggage, there’s also a cap of $500 for each individual item. So even if the five items you lost were worth $5000 in total, you’d get only $2500 back. Check electronic capsIt’s common to carry electronic gear such as cameras, iPads and smartphones so check the policy for any specific excess, individual limit or total cap for electronic goods. You may have to bear the first few hundred dollars of a loss, which means it won’t be worthwhile claiming something such as a $500 camera, or a limit may mean you get back just $500 for a $3000 digital SLR camera. A total cap of $4000 may fall short if it all disappears. Understand baggage limitsCheck not only the limit per item but also the combined value of your luggage cover. If there’s a chance you’ll exceed it, additional cover is relatively inexpensive to buy. In one case that reached the insurance ombudsman, a traveller who lost $160,000 in jewellery hadn’t considered the fact the maximum payout was $5000. Declare pre-existing conditionsA common cause of dispute is ”pre-existing” health conditions. Look for a policy that includes as standard a reasonably long list of common conditions. If you have a condition that’s not on that list, declare it. It’s better to get it added to the list, even if that means a slightly higher premium, than void your policy. Be aware the fine print is sure to give the insurer the right to check your medical history. ”Theft” coverThe theft of items from a public place is another common source of dispute. Many policies say the insurer isn’t liable for the loss of ”unattended” belongings - and that could just mean you left items at the table when you went to check the menu. While baggage may be covered if it’s stolen from the locked boot of a car, it may not be if it was on the front seat. Having a suitcase more than a metre away from you at the airport could mean it’s ”unattended”. Cancellation basicsTrip cancellation was an issue in the past year but policies can differ with regard to what cancellation means. Some policies cover all the journeys involved in a trip; others may cover just the originating flights to and from Australia. Check the definition and whether it suits your travel arrangements. Don’t double upYou may be offered the option to cover the ”excess” a car rental company will charge if you damage their car. These excesses can be as steep as $5000 or so. But you may find you already have this cover through the credit card you used to book the car. Check credit card freebiesThat said, make sure you know what conditions are attached to travel insurance that comes with your credit card. For instance, you may have to pay for your whole trip on the card to activate the cover. Fun can cost extraHigh-adrenalin activities don’t just set your pulse racing, they also give your insurer high blood pressure. If you’re going to undertake a potentially life-threatening activity while on holiday - and that’s anything from skiing to base jumping - check with your insurer to see whether you need to add this to their standard cover (paying extra).

Source: http://www.smh.com.au