A travel insurance claim that is likely to top $4 million is an example of how expensive an overseas trip can be, Southern Cross Travel Insurance says.
By Susan Edmunds of RNZ
The insurer has released a wrap of the year, which shows the value of claims made increased a lot over recent years even as the level of cover being taken has dropped.
Chief customer officer Jess Strange said the biggest driver of claims was health events.
"People travelling overseas to certain countries... the US, for example, is quite a shocker for large health claims."
The insurer paid more than $7.3m for medical and evacuation claims in the year to November 30.
That covered 3350 claims.
It paid $220,000 to one person who claimed for a Covid-related illness while in Singapore. Another person claimed $642,000 for an illness in Italy. Another claim was $95,000 for a fractured hip in India.
Strange said an even bigger claim, still in progress, was for a premature baby born in the United States.
"It's projected to be around $4 million in cost for a premature baby who has been born unexpectedly overseas.
"The US is by far and away the most expensive country but, unfortunately, when you're out of your home territory it's hard to control the costs that some of these hospitals will charge. The costs can kind of skyrocket before you know it."
She said cruises could also be very expensive because there was no set limit on what people could be charged.
"People often think 'oh it's a lost bag or a cancelled flight or a dropped iPhone', they don't think how terrifying it can be, both from a health and cost perspective, if something happens to you medically overseas.
"Every day we see the most traumatising things happen to customers, which is heart-breaking. That poor family at the moment stuck with a premature baby, imagine if they were facing down the line of a $4 million US medical bill."
But she said, even as claims were increasing, people were taking out less cover. The proportion of travellers not taking insurance had lifted from 15%t in December last year to 20% in October and 19% in November.
"Kiwis love to travel but travel insurance is often the last thing they think about or they are not educated enough to know they should purchase it at the time of purchasing their travel."
Southern Cross had a big increase in claims for trips and falls, with more than $988,000 paid in claims compared to $537,000 in 2023.
There was also $1.3m paid to support customers with gastro illness.
In the last financial year, to June 30, it paid $48.4m in travel insurance claims, up from $43.2m the same time a year earlier.
It said it was paying three times as many flu-related claims as in 2023.
It also paid $248,000 for rental vehicle claims, or about $1533 per claim.
It said 66% of international travellers purchased some form of travel insurance cover, another 19% had no cover at all and 17% relied on credit card insurance.
The percentage purchasing was highest among those aged 18 to 29.
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