When booking flights with an airline, or flights or accommodation with a travel agent, the optional 'checkbox' travel insurance often provides the same cover as travel insurance sold separately. In some cases, the cover is even better.

But with only 57% of people reading their travel insurance product disclosure statement (PDS) in detail, do you know what you're actually paying for when you tick that travel insurance box?

On this page:

• What does travel insurance from an airline cover?
• Will travel insurance cover you if your airline goes broke?
• Is travel insurance from an airline or travel agent any good?
• How much does airline travel insurance cost?
• What does travel insurance from a travel agent cover?
• How much does travel agent travel insurance cost?

What does travel insurance from an airline cover?

Just because you buy travel insurance from an airline doesn't mean it will cover you for travel problems caused by that airline.

It's midnight, and you're stranded at the airport exhausted and frustrated because your flight is cancelled. The airline desk has shut up shop, so you don't yet know when the next flight is, or whether the airline is going to pay for the mess they've created for you.

All you need is a meal, a taxi and a hotel room to sleep in. But the insurance policies sold by Qantas, Jetstar and Virgin won't cover claims to cancel or amend your trip as the result of mechanical breakdown of your transport.

In addition, Qantas and Jetstar's travel insurance specifies they won't cover "any costs for delays, rescheduling or cancellation caused by or within your public transport provider's operational control which are recoverable from or for which compensation is available from your public transport provider".

So, in English, if you have to cut short part or all of your trip because Qantas or Jetstar cancelled or rescheduled a flight for their own reasons, the travel insurance won't cover your cancellation expenses. 

You'll instead need to use the airline's own 'compensation scheme' to claim such expenses incurred. Good luck negotiating that with the empty desk at the airport.

On the other hand, the international travel insurance sold by Australian airlines will generally cover you for additional expenses or cancellation costs caused by interruptions to your flight due to severe weather and collisions.

It also covers additional expenses or cancellation claims to varying extents if you contract COVID-19, but it won't cover you if your airline has to cancel or reschedule the flight due to another pandemic.

If you're out of pocket because the airline delayed or cancelled your flight, try to claim compensation from the airline before you claim on your travel insurance – even if you bought your travel insurance from the airline.

Will travel insurance cover you if your airline goes broke?

If the airline you're flying with becomes insolvent, as Virgin Australia almost did during the travel lockdowns, then most airlines' travel insurance won't cover you for your losses. In fact, only Virgin's Travel Safe Plus International will cover your losses if any travel provider goes broke, and no policy will cover you if your travel agent goes bust and takes your money with them.

This isn't unusual – no travel insurer in our comparison will cover your losses for insolvency of a travel agent, and very few will cover you if a travel provider goes broke. That's why it's best to pay for your travel with a credit or Visa/Mastercard debit card, and use your bank's chargeback service if all else fails.

Read the terms and conditions, but lose your flight booking

You wouldn't book flights without checking the flight times, baggage allowance or in-flight meals. Knowing what travel insurance you're buying is just as essential. 

But the flight purchase screen gives you a limited time to read the PDS. Qantas's terms and conditions, for example, run to over 24,000 words. It takes the average adult over an hour and and 40 minutes to read such a document, but the Qantas flight purchase screen times out after 10 minutes, so you'll lose your flight if you try to read the fine print.

Is travel insurance from an airline or travel agent any good?

The 'checkbox' travel insurance sold while you're otherwise booking flights with an airline or accommodation with a travel agent often has similar, or sometimes even better, cover than travel insurance sold separately.

Below, we compare the prices of checkbox travel insurance to standalone travel insurance. Some of these policies are the same but some are different brands sold by the same underwriter. 

How much does airline travel insurance cost?

For two adults and one child travelling to Bali for a week, the travel insurance sold by the Australian domestic airlines ranged from $274 for the Jetstar policy to $375 for a Virgin Australia policy.

Both Virgin Australia and Qantas sell travel insurance via their flight purchase screens, and as a separate standalone travel insurance product. The Qantas travel insurance is the same product for the same price regardless of whether you buy it in the flight purchase journey or separately. 

But Virgin Australia sells a slightly different travel insurance product for a different price, depending on whether you buy it through the flight purchase screen or on its own.

Whether you buy travel insurance during the flight purchase or from a travel insurer directly, there are a couple of things to bear in mind.

• The Virgin Australia flight purchase screen charges per person for every traveller, including kids. It will prompt you to call Virgin for a cheaper price for children.
• For trips with an overnight return trip, such as many return trips from Bali to the east coast of Australia, you'll need travel insurance cover until you arrive home in Australia, not just until your flight departs from overseas.

_{Note: Quotes collected on 19 April 2024 for departure on 1 May 2024.}

What does travel insurance from a travel agent cover?

Travel insurance sold by travel agents isn't necessarily any better or worse than insurance sold direct by an insurance brand. It boils down to the terms and conditions of the policy. You need to know and understand what you're covered for – and you can't rely on what the travel agent tells you. 

Both Flight Centre and Webjet sell travel insurance policies direct to people looking to buy a policy, or during the flight purchase process. The policies are different depending on how you buy it.

Comprehensive travel insurance will generally cover you for a travel agent's fees up to a specified limit if you have to cancel a trip. Flight Centre's policies cover this up to $4000. Webjet's standalone policy also covers this up to $4000, but the Webjet policy we were offered in the purchase journey only covered travel agent fees up to $1500.

None of the policies in our comparison, including those from Flight Centre and Webjet, will cover your losses if the travel agent goes broke. So just because you buy insurance from the travel agent, don't expect it to cover you if their business runs into the ground.

_{*Travel providers include airlines, hotels, bus lines and cruise lines.}

The travel agent's word isn't binding

The Australian Financial Complaints Authority's (AFCA) dispute decisions reflect several cases where people say they relied on their travel agent's advice about their travel insurance, but were ultimately left disappointed and out of pocket.

Conversations with a travel agent aren't recorded like they generally are when you call an insurer directly, so any conversation you've had with your travel agent about insurance will boil down to hearsay. And in one decision, AFCA stated the "travel agent's opinion that the claim would or should be covered is not binding on the insurer". So don't take the travel agent's word for it.

Examples of denied claims for people relying on travel agent advice

• A couple said the travel agent told them the policy they were sold covered them for pregnancy. However, the policy provided by Zurich Insurance didn't cover them for pregnancy, and when they complained, they were unable to provide evidence that the travel agent said this.
• A man with an existing medical condition booked his first overseas holiday. He said he wasn't given a PDS or asked any questions by the travel agent about pre-existing medical conditions, and if he was asked, he would not have booked a holiday for that time knowing he may lose the money. AFCA said there was no indication the travel agent provided misleading or incorrect advice regarding the coverage.
• A woman cancelled her trip for financial reasons, which was not covered by her travel insurance. She said she was misled about the cover by the travel agent when she booked a non-refundable ticket, because the travel agent told her she would be covered for job loss.

A good travel agent will provide you with the PDS when they give you a quote for travel insurance, and they'll also give you time to read it and make a decision as to what cover is best for you. If the agent advises anything that isn't included or is contradicted by the travel insurance PDS, check with the travel insurer. 

Even if it can be proved that the travel agent gave bad advice, the travel agent's opinion is unlikely to be binding on the insurer.

How much does travel agent travel insurance cost?

For two adults and one child travelling to Bali for a week, the travel insurance sold direct by Australian online travel agents cost $246 when purchased during the flight booking process with Webjet. However, if you bought the Webjet policy directly, it cost $349 and came with a higher level of cover despite sharing the same brand name.

The travel insurance policies that both online travel agents sold as add-ons during the flight selection screen were cheaper policies, but they were also different policies to the travel insurance sold direct to people. 

And the travel insurance sold by Flight Centre for the flight selection was for one day less, only covering up until the family left Bali, not the next day when they actually returned from the trip. It may be the same case for Webjet, although this wasn't clear from the selection we made.

As noted above, for trips where the return trip is overnight, it's best to get cover until the day you arrive back in Australia, not just the day you depart. Otherwise you might be left stranded if an unexpected event affects the return flight home.

Notes: Quotes collected on 22 April 2024 for departure on 1 May 2024. (A) $250 excess and $3000 cancellation limit selected for both Flight Centre direct and on the flight purchase screen. (B) $100 excess and unlimited cancellation limit selected for both Webjet policies.

Stock images: Getty, unless otherwise stated.

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