Is Travel Insurance Worth It? Explaining The Benefits

10/03/2026
Travel Tips
On the fence about whether you need travel insurance? Consider these real-life situations where having it could make all the difference.  
woman sitting on the floor next to her suitcase in an Airport having missed a flight

This article only provides a summary of the policy benefits. Review each section of the Combined Product Disclosure Statement (PDS) / Financial Services Guide (FSG) for terms, conditions, exclusions, limits, sub-limits, and any general exclusions that apply.

Key takeaways

  • Although getting travel insurance is not compulsory for Australians, well-planned trips can take an unexpected turn. Travel mishaps like lost luggage, cancelled flights or sudden illness can happen to anyone.  
  • The financial fallout of travelling without insurance could be significant if you’re met with unwanted surprises on your trip. You might face costs for medical care, cancellations or damaged belongings that can quickly add up.
  • Travel cover could help turn crises into recoverable moments. From hospital visits to hotel delays, it may help cover expenses and smooth out the financial stress when things go wrong.  

What might a holiday mishap cost you?

You don’t have to be a daredevil or adventurer to be met with unexpected surprises on your travels. Aside from the massive inconvenience, the cost of a holiday surprise can be jarring. That’s where travel insurance comes in. The following examples give you an idea of how it could help save the day for catastrophes big and small.

Man looking stressed standing next to the baggage carousel

 

  • Missing luggage on arrival - You land in Tokyo, excited to explore the city’s neon-lit streets, but your suitcase took a detour to Osaka instead. While you wait for your case to be found, insurance may help cover the cost of buying clothes and essentials, so you can start enjoying the cherry blossoms rather than worrying about your stuff. 
  • Walking tour slip - Strolling down the cobblestone streets of Prague’s Old Town, you slip on a wet patch near the Charles Bridge. Your insurance might provide assistance on where to seek treatment, cover the doctor’s visit, and help you rearrange your itinerary, so you don’t miss the magical evening light on the Vltava River. 
  • Trip delay adventure - Your flight to Paris is delayed, and you’re faced with an unexpected night in Amsterdam. Instead of stressing, your insurance might help with hotel and meal expenses, giving you time to enjoy a canal-side dinner and a quick bike ride through the city.
  • Rescheduling due to illness - Days before your planned safari in Kenya, you come down with a severe flu and your doctor advises against traveling. With insurance, you may cover the cost of rescheduling your flights and tours and plan your adventure for when you’re feeling strong enough to see the wildebeest migration.
  • Lost camera during an excursion - On a boat trip around the stunning islands of Thailand, your camera somehow gets damaged. Although you may not get your photos back, your policy may help cover replacement, so you can keep capturing the turquoise waters and vibrant markets for the rest of your trip.
  • Scooter slip in Bali - While exploring Bali on a scooter, you slip on a wet road near Ubud and get a minor injury. Although some activities, such as riding scooters and adventure activities, may have specific requirements or exclusions under some policies, a comprehensive international travel insurance may help cover the medical check-up, so you can relax and enjoy the island’s temples and beaches.4

Ask anyone who travels, and they’ll tell you some of the best moments aren’t planned. However, not every surprise is a welcome one - that’s why many travellers opt for travel insurance**.

It’s important to remember that cover can vary depending on the activity and the policy you choose. Some activities, particularly adventure activities, riding scooters or motorbikes, and certain water sports, may be subject to specific conditions, exclusions, licence requirements, helmet and safety equipment rules, or local laws. Before travelling, always check your policy carefully to understand what is and isn’t covered, and whether additional cover may be needed for the activities you plan to do on your trip.


**This information is general in nature and does not take into account your objectives, financial situation or needs.

 

What do you get when you buy travel insurance?

You’re setting yourself up with practical support for when things don’t go to plan. Here are some of the different types of benefits insurance may provide depending on the plan type and level of cover you select:

  • Medical2 - Could help with costs if you get sick or injured overseas
  • Trip cancellation or interruption1 - Might provide reimbursement if you need to cancel or cut your trip short due to unexpected events
  • Lost, stolen or delayed belongings1 - Might provide cover for bags, passports, or valuables that go missing or arrive late
  • Emergency assistance - Can provide 24/7 access to a global support team who can organise medical care, transport or advice
  • Travel delays1 - Might compensate for extra costs if your flight or transport is significantly delayed and it impacts onward itineraries
  • Personal liability1 - Might provide protection if you accidentally cause damage or injury while travelling

Before choosing a policy, be sure to review the product disclosure statement (PDS) to understand what's covered. This document outlines all inclusions and extras. 

Woman standing with her luggage looking up to view the airport schedule display

What are some benefits of buying travel cover?

The real value of travel insurance can show up in unexpected moments that can turn a dream trip into a stressful one. Below are a few common travel scenarios where your coverage might help.

1. Travel delay expenses

Your connecting flight is cancelled after a sudden storm, leaving you stranded in another city overnight. Without cover, you could be paying out-of-pocket for last-minute accommodation and meals. With travel delay benefits, those expenses may be reimbursed.

2. Lost or stolen luggage 

You touch down in Rome, but your suitcase is nowhere to be found. Travel insurance may cover you for new clothes and toiletries. If your belongings are stolen while you’re exploring, you might be covered for replacement costs, letting you get back to soaking up the sights.

3. Cover for medical emergencies and hospital visits abroad

Let’s say you’re hiking through the lush jungles of Costa Rica, when you twist your ankle and need urgent medical attention. Without support, you may be facing hefty overseas hospital bills and language barriers. With insurance, you might be covered for hospital visits, ambulance fees and even medical evacuation depending on your policy, if things get serious.

4. Cancellation cover

Imagine you’ve booked a dream cruise on Portugal’s Douro River, but just days before departure, a family emergency means you have to cancel. Travel insurance may cover you for pre-paid, non-refundable expenses.

5. Covid cover

In today’s world, COVID-19 can still disrupt travel. Suppose you test positive the day before your flight. Many policies now include cover for covid-related cancellations or medical treatment.

6. Personal liability

You’re strolling through a bustling market overseas when you accidentally knock over a vendor’s display, damaging several handmade items. Without insurance, you could be facing an awkward situation and an unexpected bill. When your insurance includes personal liability cover, the cost of compensation or any legal fees can be handled (subject to assessment and the PDS), turning a potential holiday nightmare into a minor hiccup.

7. Rental car excess

Navigating a narrow street in a coastal town, you misjudge the space and scrape the side of your hire car. In most cases, the rental company’s excess fees can be steep. With insurance, that excess can be covered depending on your policy.

8. 24/7 overseas emergency support

While travelling in a remote region, a sudden illness leaves you unsure of the nearest hospital or how to communicate with local services. With round-the-clock access to a global assistance team, you can get help arranging medical care, guiding you through the process, and even organising transport, no matter what time zone you’re in.

Depending on the selected plan, some travel insurance may or may not include the benefits listed above, and coverage may vary for certain scenarios. However, it is important to note that each benefit is subject to limits, sub-limits, conditions, and exclusions. Please carefully review the type of plan you have selected and each policy section to understand the policy terms, conditions (including eligibility criteria), limits, sub-limits, exclusions, and general exclusions. It is essential to read the Product Disclosure Statement (PDS) to fully understand these details.

What you might risk without travel insurance

Travelling without travel cover is a bit like setting out without a backup plan. It might all go smoothly, but if something goes wrong, the consequences can be costly. Here’s what you stand to risk:

  • Unexpected expenses - Medical emergencies overseas can cost thousands, and other surprises, like lost bags, missed connections, or cancelled flights, can quickly eat into your travel budget.
  • No emergency support - Without insurance, it could be stressful to be without help if you fall ill, lose documents, or need help navigating a bigger natural event or storm while in another country.
  • No reimbursement for cancellations or delays - If sudden illness, bad weather, or airline issues force a change of plans, you could lose your pre-paid bookings entirely.

Even the most careful travellers can’t predict every twist. Insurance cover could help you recover financially and soften the blow if things go awry.

FAQs

Is travel insurance worth it for domestic travel?

Domestic travel insurance may cover cancellations, lost or delayed luggage, rental car excess. 

Do I really need travel insurance for short trips?

Even quick getaways can come with unexpected hiccups. For this reason, travel insurance is also available for shorter getaways.

Isn’t travel insurance already included with my credit card? 

Some credit card policies may offer limited cover or lower benefit caps. Always check the fine print, compare your options carefully and consider whether a standalone policy better suits your needs. 

How much does travel insurance cost? 

Costs vary based on many things including your destination, trip length and the level of cover you choose. Consider the cost of insurance compared to the potential expense of an emergency.

Woman sitting on a bed with her tablet and travel map smiling while planning

When is travel insurance worth it? 

Not sure if you need to add travel cover to your trip? Think about these questions**:

  • Will you be in a country where healthcare costs a lot?
  • Are you booking flights, tours, or hotels you can’t get a refund on?
  • Will you be driving a rental car or riding a scooter overseas?
  • Are you bringing valuable items like cameras or laptops?
  • Could your plans change because of personal, work, or health reasons?
  • Do you want access to help in an emergency, wherever you are?
  • Are you travelling to places with known natural events like cyclones, typhoons or tornados?
  • Would surprise costs throw off your holiday budget?

Travel is all about embracing new experiences and creating memories that stay with you long after you’re home. One day it might be watching the Northern Lights dance above Iceland; the next, savouring the sights and sounds of a night market in Taipei. But for every unforgettable moment, there’s always a chance that something could derail your plans.

Travel insurance could help turn flight cancellations, lost luggage, or unexpected medical bills into manageable hiccups, so you can keep your focus on the journey, not the setbacks**.

Before you go, it can also help to brush up on a few tips for a smoother holiday, so you’re better prepared for whatever comes your way.

**This information is general in nature and does not take into account your objectives, financial situation or needs.

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Things to note

The information in this article has been prepared for general information purposes only and is not intended as legal advice or specific advice to any particular person. Any advice contained in the document is general advice, not intended as legal advice or professional advice and does not take into account any person’s particular circumstances. Before acting on anything based on this advice you should consider its appropriateness to you, having regard to your objectives and needs.

Insurance Products (excluding Travel Insurance) are issued by RACQ Insurance Limited ABN 50 009 704 152 (RACQI) and arranged by RACQ Distribution Services Pty Ltd (RDS) ABN 35 116 361 650, AFSL 567130 and RDS' authorised representatives (including RACQ Operations Pty Ltd ABN 80 009 663 414, AR No. 234978 (RACQO)). Conditions, limits and exclusions apply.

Any advice provided by RDS and RACQO is general advice only and does not take into account your personal objectives, financial situation or needs and you will need to consider whether the advice is appropriate for you. Read the Product Disclosure Statement (PDS) before making a purchase decision on the product. You can also access our Target Market Determinations on this website.

RDS receives a commission from RACQI for the policies it arranges. RACQO receives fees paid for services it provides to RDS. Further details about remuneration are available on request prior to purchasing.

Banking and loan products issued by Members Banking Group Limited ABN 83 087 651 054 AFSL/Australian credit licence 241195 trading as RACQ Bank. Terms, conditions, fees, charges and lending policies apply. This is general advice only and may not be right for you. This information does not take your personal objectives, circumstances or needs into account. Read the disclosure documents for your selected product or service, including the Financial Services Guide and the Terms and Conditions, and consider if appropriate for you before deciding.

Except for RACQ Bank, any RACQ entity referred to on this page is not an authorised deposit-taking institution for the purposes of the Banking Act 1959 (Cth). That entity’s obligations do not represent deposits or other liabilities of RACQ Bank. RACQ Bank does not guarantee or otherwise provide assurance in respect of the obligations of that entity, unless noted otherwise.

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RACQ Operations Pty Ltd (ABN 80 009 663 414, AR No. 234978) and Members Travel Group Pty Ltd (ABN 45 144 538 803, AR No.432492) (RACQ) are authorised representatives of the RACQ Travel Insurance insurer Tokio Marine & Nichido Fire Insurance Co., Ltd. (ABN 80 000 438 291 AFSL 246 548) (Tokio Marine). Tokio Marine Management (Australasia) Pty Ltd (ABN 69 001 488 455, AR No. 1313066) is an authorised representative of Tokio Marine, and administers RACQ Travel Insurance as the managing agent on behalf of Tokio Marine. Terms, conditions (including eligibility criteria), exclusions, limits and sub-limits apply. Any advice is general advice only, and does not take into account your specific objectives, financial situation or needs. Before you purchase, please consider the Combined Product Disclosure Statement (PDS) / Financial Services Guide (FSG) and Target Market Determinations (TMDs) available at racq.com or on request from RACQ.

1Terms, conditions (including eligibility criteria), limits, sub-limits and exclusions apply. Refer to Combined Product Disclosure Statement (PDS) / Financial Services Guide (FSG) for full details. Some cover benefit limits or sub-limits may be less than your chosen excess and therefore the insurer may not contribute anything to your claim.

2‘Unlimited’ means there is no cap on the maximum dollar amount which may be paid out for this benefit, noting that how much is payable for a benefit depends on the specific cover in the relevant section of the Policy Wording and any applicable exclusions. Medical, hospital, dental or any ancillary benefits or expenses incurred more than 12 months from the time treatment for the injury or illness was first received will not be covered. Terms, conditions (including eligibility criteria), limits, sub-limits and exclusions apply. Refer to Combined Product Disclosure Statement (PDS) / Financial Services Guide (FSG) for full details.

4‘Moped or Scooter’ (two or three wheeled motor vehicle (including e-scooters) with engine capacity up to 50cc), ‘Motorcycle’ (two or three wheeled motor vehicle (including electronic versions) with engine capacity equal to or greater than 50cc) and ‘Quad Bike’ are defined in the PDS. Cover is subject to general exclusions, including where you are operating or travelling as a passenger without wearing a helmet and driving without meeting specific licensing requirements. Refer to the PDS for full definitions, terms, conditions and exclusions.