From benefits for different travellers to an analysis of Air New Zealand's $20 add-on, our guide provides essential insights into coverage options and clarifies common misconceptions about domestic travel insurance and how it can protect your travels against unforeseen risks
Updated 11 June 2023
Summary:
Domestic Travel Insurance is, as the name suggests, intended to protect you during your domestic travels when things go wrong or you get sick. Generally, the key coverage areas are as follows:
- Travel Delays: If you experience any travel delay, the policy pays for expenses incurred.
- Trip Cancellation or Amendments: If you need to cancel your trip or make amendments, the policy covers you up to a certain limit.
- Luggage and Travel Documents: The policy covers the loss or damage of your luggage and travel documents.
- Rental Vehicle Insurance Excess: If you hire a rental vehicle for your travels, the policy covers the excess insurance for any accident or damage.
- Loss of Income: If you experience loss of income due to unexpected circ*mstances while travelling, the policy provides a cover.
- Personal Liability: If you're held legally liable for injury to someone else or damage to their property, the policy can provide cover.
Add-on cover can also include skiing and snowboarding trips, increased valuables limits and, unless already covered, cancellation options.
To help explain domestic travel insurance and whether or not it's suitable for your needs, our guide covers:
- Is a Domestic Travel Insurance Policy Worth the Cost?
- Assessing the Value of Air New Zealand's $20 Add-On Domestic Cover
- Domestic Travel Insurance - Frequently Asked Questions
Know This:Many New Zealanders travellers mistakenly believe that insurance is only required for international trips when, in reality, domestic travel presents its own unique set of risks and uncertainties.
Domestic policies came to the market around 2020 (with the Southern Cross policy launched in September 2020 per this Stuff.co.nz article) and were promoted to protect against significant stress and financial burden from a problematic trip within New Zealand. Of course, like all travel insurance policies, there are exclusions and limits, meaning the cover can be restricted or non-existent for certain types of claims.
The Most Suitable People for Domestic Travel Insurance
Domestic travel insurance is beneficial for a wide range of travellers. Here are a few examples:
- Frequent Travellers: Those who often travel within New Zealand for leisure or business who want to protect themselves from the costs of unforeseen circ*mstances can benefit from a domestic insurance policy. The policy can insure against the costs associated with travel changes, illnesses, accidents and rental car excess costs that inflate the cost of a rental.
- Family Holidays: If you're planning a family holiday, domestic travel insurance can cover everyone for unforeseen circ*mstances. For instance, if a child falls ill before the trip and you have to cancel, the policy would cover the cancellation or amendment fees.
- Senior Citizens: Senior travellers can enjoy their golden years exploring different parts of New Zealand without worrying about unforeseen incidents such as cancellation, lost bags and cancelled flights, as a domestic policy usually covers medical and dental emergencies, personal liability, and other unexpected events.
- Rental Vehicle Users: For those planning to hire a rental vehicle, domestic travel insurance usually covers excess rental vehicle insurance, which can save you a significant amount of money, while Avis and Budget charge $30+ a day for excess reduction.
Is a Domestic Travel Insurance Policy Worth the Cost?
When considering if domestic travel insurance is worth the cost, evaluating the potential financial risks of travelling without it is essential. Here are a few points to consider:
- Potential Losses: Consider the losses you could incur due to cancelled trips, medical emergencies, loss or theft of belongings, or personal liability incidents. If these costs are likely significantly more than the insurance cost, it's worth investing in a policy.
- Peace of Mind: Beyond the monetary aspect, domestic travel insurance provides peace of mind. Knowing you are covered in case of any unforeseen events allows you to enjoy your trip without worrying about potential financial losses.
- Comparison of Costs: Look at the insurance policy cost compared to your trip's total cost. If the cost of insurance is a small fraction of the overall trip cost, it might be worth considering.
- Insurance Options: Most insurance providers offer various plans and optional extras, allowing you to tailor the coverage to your needs and budget.
- Unforeseen Circ*mstances: Despite careful planning, unforeseen circ*mstances can occur. Having insurance ensures you're covered in such situations.
Domestic Travel Insurance vs ACC vs Public Healthcare
The first question many New Zealanders have about domestic travel insurance is why it's needed when we have a public health system for illness and ACC for treatments. Domestic travel insurance goes beyond medical and uniquely offers coverage for trip cancellations, loss or damage of personal belongings, rental car excess, and certain medical expenses.
Assessing the Value of Air New Zealand's $20 Add-On Domestic Cover
When purchasing a return domestic ticket with Air New Zealand, a $20 insurance add-on option (or $10 for one-way flights) often gets overlooked. Is this add-on worth it? It depends on your needs and the potential risks associated with your journey, as outlined in this September 2022 Stuff.co.nz article.
Our view is simple - if your trip is high value, (e.g. plenty of pre-booked hotels, car rental and prepaid activities), then the policy may be worthwhile. For $20 for a return trip, it's impossible to get the same or similar cover for this price outside of the Air New Zealand booking process. That being said, anyone going on a short trip and staying with family may find the coverage less useful given the lower value of the travel undertaken.
The Benefits
The Air New Zealand policy offers a comprehensive safety net for unforeseen events, making it an attractive option if your trip faces any potential disruptions. Here are the key coverages:
- Emergency Medical and Dental Coverage: The policy will cover up to $200 per event for emergency medical or dental treatment in New Zealand, with a total limit of $1,500. This does not cover cosmetic procedures, pre-existing treatments, or alternative health treatments.
- Additional Expenses: If unexpected events lead to a change in your travel plans, the policy will cover extra transport and accommodation costs, with coverage up to $3,000 for return journeys and $1,000 for one-way journeys, provided your home is more than 50km from the airport.
- Cancellation Costs: The policy covers up to $5,000 of non-refundable costs for return journeys and $2,000 for one-way journeys, should you need to cancel your trip due to unforeseen circ*mstances.
- Baggage and Documents: The policy covers costs associated with the loss, theft, or damage of baggage or personal items, taking depreciation into account. It also covers the cost of replacing lost or stolen travel documents and credit cards.
- Delayed Baggage: If your checked baggage is delayed by more than 12 hours, the policy covers the cost of essential replacement items.
- Rental Vehicle Coverage: If you rent a vehicle and it gets damaged or stolen during your journey, the insurance will cover the excess or repair costs.
- Travel Delay and Missed Connections: The policy provides cover for reasonable expenses if your pre-arranged transport is delayed and for additional public transport and accommodation costs if you miss a pre-booked connection due to cancellations or delays.
Important:
- Exclusions: There are many exclusions; please review the most up-to-date policy which you can download during the domestic flight booking process on Air New Zealand.
- Excess: Please note that a $20 excess applies to benefits 2, 3 and 4 above, whereas for 1, 5, 6, and 7, there is not excess charged.
- Claims You'll need to provide all necessary documentation, including receipts and confirmations from transport providers, to Cover-More, Air New Zealand's insurer, when making a claim.
Weighing the Pros and Cons
- Considering your travel plans, potential risks, and the wide-ranging coverage of this policy can help you decide if it's worth the $20.
- While it excludes COVID-related claims, the policy still offers good value for protection against other unforeseen events, given the cost of rebooking domestic flights at short notice can be very expensive.
Frequently Asked Questions Concerning Air New Zealand's Domestic Cover
The questions below are commonly asked, but if you need to know specifics, please contact Air New Zealand or Cover-More.
Can I add the $20 add-on domestic cover after I've already purchased my ticket?
No - you must select the add-on at the time of purchasing your ticket.
What does 'unforeseen circ*mstances' mean in the context of this policy?
Unforeseen circ*mstances' typically refer to events that are out of your control and could not have been predicted or avoided. Examples may include:
- Sudden illness or injury
- Severe weather conditions disrupting travel
Does the policy cover COVID-19 related disruptions?
No, the policy currently excludes COVID-19-related claims. This means any disruptions to your travel plans due to COVID-19, including illness or travel restrictions, are not covered.
Can I buy the policy with a one-way airfare and a seat or seat+bag airfare?
Yes, the price of cover is $10 for one-way airfares, and you can buy the insurance with any airfare.
Domestic Travel Insurance - Frequently Asked Questions
Domestic Travel Insurance is not well understood in New Zealand. The information below is designed to explain the policies and risks they protect; any specific policy question should be directed to the relevant insurer.
If I have private health insurance, do I still need domestic travel insurance?
Travel insurance has many benefits beyond healthcare, luggage, trip cancellation and rental car excesses being some of the more valuable. Health insurance won't cover any of those and is not seen as comparable to domestic travel insurance.
Why do I need domestic travel insurance if I'm not leaving New Zealand? What risk am I insuring for?
Even when travelling within New Zealand, you can encounter unexpected problems, such as trip cancellations, lost luggage, or a rental car accident. Domestic travel insurance can help protect you from these potential financial losses.
If ACC covers accidental injuries and public healthcare will assist with medical emergencies and other treatment, why would I need domestic travel insurance?
While ACC does provide coverage for injuries due to accidents, and you can always visit a hospital for emergency treatment, neither of these services covers trip cancellations, travel delays, loss or damage of personal belongings, or rental vehicle insurance excess. They also won't help if you need to cancel your trip last minute, if your luggage gets lost or stolen, or something else. In summary, domestic travel insurance offers more than medical treatments.
Does domestic travel insurance cover medical expenses?
Domestic travel insurance often includes limited medical and dental expenses coverage intended to cover unforeseen accidents or emergencies during your trip. However, the healthcare coverage may not be as comprehensive as that in international travel insurance, as your domestic healthcare system is expected to primarily cover this aspect.
What is a rental vehicle insurance excess cover?
If you rent a vehicle during your travels and it gets damaged or stolen, you may be liable to pay an excess charge. Rental vehicle insurance excess cover can protect you from this potential expense. Our guide to rental cars and insurance has more information.
Are there options for annual domestic travel insurance policies?
Yes - some insurers offer thistype of policy which can cover all your trips within a specified period (usually 12 months), with each trip typically having a maximum duration.
Does domestic travel insurance cover trip cancellations due to COVID-19?
This varies by insurer and specific policy. Some policies may provide coverage if you contract COVID-19 and are unable to travel, but many policies do not cover cancellations due to changes in travel restrictions or quarantine requirements. It's essential to read your policy wording carefully to understand what is and isn't covered concerning COVID-19.
Can I buy domestic travel insurance after I've already started my trip?
You can, but there will often be a stand-down period of claims (e.g. no claims for the following 48 hours etc.), although this does vary by insurer. All of this is avoided by buying are policy before departure.
Related Guides and Resources: Travel Insurance Comparisons:
- Compare Travel Insurance
- Basic vs Comprehensive Travel Insurance
- Over 70s Travel Insurance
- Pre-Existing Medical Conditions Travel Insurance
- Cruise Travel Insurance
- Annual (Multi-Trip) Travel Insurance
- Ski Travel Insurance
- Domestic Travel Insurance
- Pregnancy Travel Insurance
- Travel Insurers Directory
- Travel Insurance Glossary
Essential Resources
- Claiming on Travel Insurance
- Do I Need Travel Insurance?
- Travel Insurance Excess Explained
- Health Insurance vs Travel Insurance
- ACC vs Travel Insurance
- Travel Packing List
- How to Renew a New Zealand Passport
- What is TAANZ?
- Australia NZ Reciprocal Health Care Agreement
Travel Insurer Reviews
- 1Cover Travel Insurance
- AA Travel Insurance
- AMI Travel Insurance
- Cover-More Travel Insurance
- Southern Cross Travel Insurance
- Tower Travel Insurance
