AA Insurance Travel Insurance

Updated 24 March 2019 (Draft)
Summary of AA Travel Insurance
  • Looking to buy AA Travel Insurance? Our guide covers its stand out points, pros, cons and limitations. 
  • Policies cost at least $400+ for a couple for 4 weeks in Europe; our pricing review compares AA Travel Insurance to other popular products offered by AMI, Southern Cross and 1Cover.
  • AA Travel Insurance is widely popular, insuring thousands of New Zealanders every year who travel overseas. But is it right for you? ​
  • We update our example pricing every 90 days, with an extensive number of policies reviewed in our travel insurance comparison guide.
Our guide covers:

Travel Insurance Basics - What You Need, and Why

Travel insurance is a major expense on any holiday, but it need not be. There are many companies selling travel insurance, but finding out 'which one is best' is not easy. 

What should travel insurance cover?

Basic travel insurance must cover four key risks: 
  1. Medical expenses - should you get sick or have an accident, all of your medical costs will be taken care of. 
  2. Lost, damaged and stolen items - if something is lost, stolen or damaged, you will be paid out up to a reasonable amount
  3. Cancellation - if you book your travel arrangements and then get ill, you can claim on the non-refundable costs
  4. Disruption - if you need to return home, experienced delayed flights or missed connections, you will be compensated

Limits always apply
  • Be aware - many travel insurance policies limit almost EVERYTHING. For example, the maximum cover of individual items is usually $1,500 to $2,500, unless you specify extra cover and pay additional costs.
  • This means that if you lose a $5,000 watch or $3,000 handbag, the most you will be able to claim is the limit of the policy, unless you insure the items separately.

Do I need travel insurance?

If you're going overseas, basic risks must be covered to prevent serious financial problems if and when disaster strikes. For example, medical costs can run up into thousands of dollars for simple treatments overseas. Theft, or damage to belongings can be expensive and ruin a trip, while cancellation and disruption to your travel plans can be costly.

By insuring for these risks with travel insurance, you are 100% protected if and when a problem arises. If you don't have travel insurance, you are taking a serious risk. The media is full of stories about uninsured travellers stuck in hospitals while bills run up into thousands of dollars. Worse than that, many hospitals around the world will not treat you unless there is payment upfront.

Is expensive travel insurance better than cheaper travel insurance?

The best travel insurance is the one with the best cover and minimum exclusions. A low excess (the cost of making a claim) is also an advantage. What each insurer charges is not a reflection of the benefits offered - comparing travel insurance is essential to avoid being ripped off.

AA Travel Insurance in 10 Points

To simplify the policies, we present the most important details below.

1. What does the policy cover?

AA Travel Insurance's most popular policy is the 'Comprehensive Plan'. This includes a range of benefits covering:
  • Cancellation and Travel Disruption
  • Medical Events
  • Life Benefits
  • Personal Baggage, Effects and Personal Money

In the table below, we outline the benefits and limits of AA Insurance's Comprehensive plan, and compare it to those offered by 1Cover, AMI and Southern Cross. You can also download it as a PDF here (TBC). 

2. Is there anything that could stop me from being paid out for a claim

There are few exclusions; which have been reported in the media. For example:
  1. ​Cancellation before or during travel - Stuff reported a story where the costs of returning to New Zealand due to the death of a policyholder's mother was not covered, because there is no cover if the event was caused by a "pre-existing medical condition suffered by a Close Relative or any complications directly attributable to those conditions". If you have a sick relative and go on holiday only to get a call to return home, it's unlikely you will be covered for the costs you incur for cancelling a trip or returning earlier. 
  2. Policy purchase and cover - your policy needs to be purchased BEFORE you start making your travel arrangements. If you purchase a travel insurance policy AFTER making your travel arrangements, and later need to cancel your trip before your departure, you won't be covered.
  3. Resumption of Travel - if you are forced to return to New Zealand due to serious Injury, illness, disease or death of a close relative, you won't be covered to resume your travel overseas at a later date if you were away already for more than 50% of your time, or the total trip is less than 14 days in total. This means any policy issued for less than 14 days doesn't include this cover.

3. Is it expensive?

  • In summary, yes, when compared to similar policies available from other insurers. AA Insurance's quotes were the highest for our example trips for visitors to the USA and Europe, and the second highest for Australia and Bali. We compared AA Travel Insurance with 1Cover, AMI and Southern Cross travel insurance policies.​
  • The policy offers a range of benefits, some are superior to other insurers, but others are not. The table above details the cover. 
  • On 22 March 2019, we obtained sample quotes for two travelling couples - two 35-year-olds, and two 70-year-olds. The overseas cover we sourced quotes for four trips - 7 days in Australia, 2 weeks in Bali, 2 weeks in the USA and 4 weeks in Europe. The results are presented below.
Table 1 - Quotes for two 35-year-old travellers
Insurer
1 Week Australia
2 Weeks USA
2 Weeks Bali
​4 Weeks Europe
1 Cover Travel Insurance
$100.04
$​344.46
$189.71
$​288.33
AA Travel Insurance
$90.00
$512.00
$280.00
$580.00
​AMI Travel Insurance
$84.00
$382.00
​$314.00
​$436.00
Southern Cross Travel Insurance
$70.01
​$312.00
$168.61
$286.54
Table 2 - Quotes for two 70-year-old travellers​
Insurer
1 Week Australia
2 Weeks USA
2 Weeks Bali
​4 Weeks Europe
1 Cover Travel Insurance
$​128.66
$759.63
$328.96
$​532.21
AA Travel Insurance
$144.00
​$786.00
$404.00
​$878.00
​AMI Travel Insurance
​$156.00
$644.00
$558.00
$654.00
Southern Cross Travel Insurance
​$150.51
$670.80
​$336.10
$565.09
Quotes obtained
1 Cover Travel Insurance - $100 Excess, Comprehensive Policy
AA Travel Insurance - $100 Excess, Comprehensive Policy, NB: Prices are taken before 10% AA Member discount
AMI Travel Insurance - $100 Excess, International Plan. No existing customer discount applied. 
Southern Cross Travel Insurance - $100 Excess, TravelCare Policy. Prices are taken before 5% Member discount 
Note: Where "Europe" isn't an option, we have selected "France" in its place. 

4. Who guarantees the policy?

Allianz, which is a multinational insurer, provides the cover and handles all claims, on behalf of AA Insurance. Allianz is one of the largest insurers in the world - AA simply sells insurance under its own brand, but the policy is 100% underwritten by Allianz.

5. Does Allianz sell other travel insurance in New Zealand?

Yes, similar cover is offered by Webjet and ANZ Travel Insurance.

6. Is there 24/7 support, how do I make a claim and how long does it take process a claim?

  • ​Emergency assistance is provided 24 hours/7 days a week by Allianz Global Assistance who operate an international assistance network. 
  • Policyholders make a claim via the AA Travel Insurance website.
  • AA makes it clear that claims (except those medical-related), will normally be settled when the traveller returns to New Zealand. This means if you lose an item overseas, have money stolen, experience a flight disruption or any other misfortune that isn't medical, the standard procedure is to asses your claim when you return home.

7. What about pre-existing medical conditions?

Some are automatically covered, but others are not. Our section on pre-existing (LINK) below explains everything in detail.

8. Can I get a discount on the policy?

Yes, if you are an AA member, you automatically qualify for 10% off the total price of the policy.

9. What are the alternatives that offer a similar level of cover?

Similar cover is offered by a range of travel insurers, including AMI, Southern Cross and 1Cover.

10. What happens if my travel insurance claim is rejected?

Many claims are rejected every year by travel insurers all over New Zealand. If this happens to you, and you feel the decision is wrong or not justified, you can take your complaint to the Financial Services Complaints Limited (FSCL). Travel insurance policies, in general, make up a large number of the complaints formally investigated by FSCL. According to our research, after having their claims rejected people complained to the FSCL about the following topics:
  • The policyholder not receiving important information, or if information was received, it was ambiguous or poorly worded.
  • The policyholder failing to disclose certain information
  • The policyholder not understanding the insurance policy 

If you do need to complain, the FSCL will investigate and see if your claim is valid. If it is, it will decide in your favour, which usually means the insurer will pay out. However, if the travel insurer's original assessment is found to be correct, you won't receive any money. There is no cost for using the FSCL.

AA Travel Insurance Pros and Cons

Pros
  • The Comprehensive policy, covering a number of pre-existing conditions, comes with a generous $1,500 per-item limit on personal belongings.
  • There is a $0 excess option - this means you can claim without having to pay a fee.
  • The benefits apply to anyone aged up to 99 years of age.
  • The cover and claims are managed by Allianz Insurance who provide 24/7 global support. AA Insurance is a reseller of Allianz's insurance, which is normal in the travel insurance industry. Many other New Zealand travel insurance companies sell the same, or very similar, cover, backed by Allianz.

Cons
  • The highest pricing for four of eight sample quotes, and the second highest quotes for three others. 
  • AA Members receive a 10% discount on all premiums, but this does not make the prices competitive with other establishes insurers such as Southern Cross and 1Cover, which provide very similar policies at a lower price. 
  • Similar cover at half the price? We compared the cover and policy costs to Webjet Insurance, who both use Allianz. Webjet sells similar cover of core benefits (medical, personal liability, personal items, dental etc) for around 40% to 60% of the price of AA Travel Insurance. We base this on a sample quotes for our two 35-year-old travellers visiting the USA, Bali or Europe.

Overall:
  • AA Travel Insurance is a major player in New Zealand, and offers a level of cover consistent with that of other providers. The usual limitations and stipulations apply. 
  • Better prices are available from other providers - we believe those selecting AA Travel Insurance are paying much more than the market average for similar cover.

5 Must-Know AA Travel Insurance Facts

Travel Insurance is about covering for the unpredictable

  • Many New Zealanders take a risk and say “why would I get travel insurance? I probably won’t use it!”. It’s the “probably” which is the issue, and if disaster strikes, being without cover can be frightening and financially ruinous.
  • Any trip overseas exposes you to unpredictable events; no one can predict the future and even “safe” destinations expose you to unforeseen risks.
  • We believe travel insurance is about protecting yourself from the things you don’t plan for and don’t want to pay for.
​

Be completely honest when buying a policy and ALWAYS declare ALL medical conditions

All travel insurers, including AA Insurance, have a good reputation for paying claims, but they are under no obligation to pay you if you lied or withheld information when you applied. To best protect you from a nightmare later on, give your insurer a full description of any or all of your health problems. You may have to buy additional cover for pre-existing conditions, but this protects you should something happen while you're away. 

AA Travel Insurance's Comprehensive Policy will include pre-existing medical conditions when the condition is:
  1. Stable and well controlled and your treatment (including medication) has not changed in the 12 months prior to the date your policy is issued; and
  2. Your condition is not an ongoing or chronic condition for which you have received treatment at a hospital in the 5 years prior to the date your policy is issued; and
  3. You have not had surgery or hospital treatment for the medical condition in the 12 months prior to the date your policy is issued; and
  4. The condition does not involve your heart (excluding hypertension), brain, a transplanted organ, renal failure, thinning of the bones. a lung condition (excluding asthma), cancer, an aneurysm, blood or lung clots, insulin--dependent diabetes, major allergic reactions, back problems if you have had spinal surgery; and/or surgery involving any joints.
  5. Even if you do not seek cover for pre-existing medical conditions, they must be disclosed as part of AA Travel Insurance's non-disclosure policy. 
  6. If AA Travel Insurance decides to cover you, you will be charged an additional premium and written confirmation of extending cover will be issued. It's important to have this with you when you travel.
  7. Advance purchase: If, for example, you buy the policy 6 months in advance before your trip, and then later, leading up to your departure, you have treatment for a medical condition that arises, you will need to notify AA Insurance immediately to see if you will be covered for any related-medical expenses overseas.
​

Check our list of activities that travel insurance generally doesn’t cover, UNLESS you specifically request to add it on

  • If you plan to go beyond the beaten path and hire a scooter without a helmet, go off-piste skiing or do anything else considered adventurous, check that AA Travel Insurance covers it. If it doesn't, you will be uninsured if anything goes wrong.
  • AA Travel Insurance specifically excludes microlite flying, parachuting, sky diving, mountain and rock climbing, rodeo, and riding a moped or motorcycle (whether as driver or passenger) greater than 200cc without a helmet or without a valid licence, among others.​
​

Intoxication or being under the influence of drugs will void your cover

AA Travel Insurance's terms and conditions make it clear - you won't be covered if you are "under the influence of any intoxicating liquor, drugs or substances". It doesn't define if 'under the influence' is one drink, two drinks or intoxicated by local laws or New Zealand laws. We asked AA Insurance to clarify, their response:

(Insert response)

What does this mean for day-to-day travel?
  • It's best to behave with caution, and be responsible. If you go out at night and lose your bag while intoxicated, AA Travel Insurance won't cover you.  
  • It’s important to have common sense when it comes to alcohol and travel. If you are going to go wine tasting, don’t drive your rental car until you are sober. If you have half a bottle of wine at lunch and then go skiing, you may invalidate your policy.
​

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AA Travel Insurance Frequently Asked Questions

How many people can I include a policy?

You can include up to 10 adults on one policy.

Are children covered for free?

Yes - dependent children under 21 years are covered at no additional charge.

Does AA Travel Insurance cover lost, stolen or damaged luggage?

Yes - up to a maximum of $30,000 and $1,500 per item.

Does AA Travel Insurance cover cancellation fees?

Yes - unlimited cover is provided for loss of deposits and cancellation of any journey paid in full. But, there are exceptions, and you will need to purchase a policy BEFORE you make any bookings to ensure they are covered.

Can I pay to reduce my excess?

Yes - AA Travel Insurance offers excesses in $200 and $100 - choosing a $100 excess means the overall policy cost increases slightly.

What is the maximum length of a single trip?

The maximum time is one year (365 days)

What additional extras are there, and how much do they cost?

​Personal items valued at above $1,500 are excluded, unless you wish to purchase cover for them. As an example, we received a quote of $50 to insure an item valued at $2,500 for four weeks in Europe. Standard excess amounts apply to any claim.

Am I covered if I go on a cruise?

Yes - AA Travel Insurance covers cruises.

Am I covered for skiing and my equipment?

Yes - but only if you stick to on-piste on a regular ski field, and the activity is non-competitive. 

Am I covered if my tour company collapses?

No - this is a standard exclusion. The same applies to any airline, transport provider, travel agent, or wholesaler.

I'm not a New Zealand resident - can I buy cover?

<CHECK THIS - ALLIANZ MAIN SAYS NO, AA SILENT ON ISSUE, IMPLIES 'YES'>
Yes - but you must live in New Zealand. AA Travel Insurance does not specify that policyholders must be New Zealand residents or citizens.

What size moped or motorbike am I covered to ride overseas?

A motobike or scooter with a 200cc engine is the limit. To be insured, you must wear a helmet at all times.

Can I extend or upgrade my policy while I am travelling overseas?

TBC

Does AA Travel Insurance cover rental vehicle excess?

Yes - both the Comprehensive and Essentials policies cover you for the insurance excess you are required to pay, as a result of loss or damage to a rental vehicle you have hired, up to $5,000 (Essentials) and $6,000 (Comprehensive). This means you can avoid paying for 'excess protection' or 'excess reduction' insurance when you rent a car, as long as you're comfortable putting a hold on your credit card. 

Where is AA Travel Insurance based?

AA Travel Insurance's head office is in Auckland.

What is the best way to buy an AA Travel Insurance policy?

Online - (TBC - branch?)

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