Do You Really Need Travel Insurance?

Understand the importance of travel insurance with our comprehensive guide, which explains the various policy types, coverage limits, claims processes, costs and must-know facts.

Updated 20 February 2026

Summary

Travel insurance is a safety net that travellers shouldn't overlook. Whether it's medical emergencies, trip cancellations, or lost luggage, a good travel insurance policy can save you from unexpected expenses while overseas.
We see it to be an indispensable safeguard for travellers, protecting them from unforeseen expenses related to medical emergencies, trip disruptions, or lost belongings.
Too often New Zealanders get into trouble overseas and don't have insurance, leading to all sorts of problems, a Givealittle campaign and long-term debt. Worryingly, even if you do have travel insurance, the cover may not be sufficient, as outlined in this difficult case of a young Otago student in the USA.
This guide explores the necessity of travel insurance, the factors influencing your policy choice, policy exclusions, the significance of understanding the claim process and travel advisories, and must-know considerations.
We explain the different policy types, such as group/family insurance, annual multi-trip insurance, senior cover, electronic devices coverage, and COVID-19-related policies.

Our guide covers:

Video Explanation: MoneyHub Founder Christopher Walsh explains this guide in detail in the video below:

Our Best Travel Insurers and Why Southern Cross Travel Insurance Stands Out

MoneyHub is focused on making travel insurance simple - we read the policies, analyse the drawbacks, compare quotes and do the hard work to bring you a shortlist of genuinely comprehensive options. After reviewing hundreds of pages of policy documents from over ten insurers, Southern Cross Travel Insurance (SCTI) consistently delivers the most robust coverage for New Zealand travellers.

What Our Analysis Found:

$25,000 luggage coverage (vs $10,000 from most competitors) - that's 2.5x more protection for your valuables
Unlimited cancellation option available - the only major insurer offering this level of flexibility - $2,500 to unlimited for each person, with the option to pay a premium for unlimited coverage
Plain English policy with WriteMark certification - you actually understand what you're buying
Higher individual item limits - $3,000 per item per person for electronics (up to a maximum of $10,000 for all unspecified mobile phone, laptops, personal computers, tablets and cameras, including related accessories with depreciation applying)
Automatic pregnancy coverage up to 24 weeks excluding common pregnancy symptoms and pregnancy complications experienced in the 3 years prior to buying the policy

The Reality Check: While Allianz offers excellent adventure add-ons and multi-trip options that suit some travellers perfectly, SCTI's base coverage is significantly more generous. You're getting meaningful protection and are fully covered in the event of a disaster.

Personal Disclosure: Christopher Walsh, MoneyHub Head of Research and Founder, uses SCTI for his travel insurance and will continue to do so given the pricing and coverage for travels to UK, USA, Pacific Islands, Europe and Asia. The slightly higher premium (often just $10-20 more from other insurers) buys you thousands of dollars in additional coverage limits.

The Uncomfortable Truth About Travel Insurance: Many insurers compete on price by cutting coverage. That $30 "bargain" policy might leave you $15,000 short on stolen luggage or unable to cancel a $20,000 trip. SCTI doesn't play that game - they focus on comprehensive coverage first, competitive pricing second.

Get Your SCTI Quote - See the Difference for Yourself:

Takes 1-2 minutes online
Clear pricing with no hidden exclusions
14-day cooling-off period if you change your mind

Important: This isn't about choosing the cheapest option - it's about choosing insurance that actually works when you need it. The few extra dollars you spend on proper coverage could save you thousands in the event of an unexpected issue.

Why Southern Cross is Different: Southern Cross Travel Insurance is a subsidiary of Southern Cross Health Society – a member-driven Friendly Society that’s been helping its members access private healthcare since 1961. The Travel Insurance business returns its profit to Health Society, which it utilises to keep premium increases down for its members.

Important: Why Southern Cross Travel Insurance is Our Top Pick for Every Destination
Our dedicated guides to each country have further insights - we summarise what you need to know below:

Australia & Pacific Islands: Medical emergencies in Australia aren't fully covered by reciprocal agreements, leaving you with gaps. In Fiji or Rarotonga, medical evacuations can cost $50,000+. SCTI's unlimited medical coverage and superior luggage limits ($25,000 vs competitors' $10,000) make them essential for Pacific travel.
Asia (Bali, Thailand, Japan, etc.): Motorbike accidents and theft are real risks in Southeast Asia. SCTI covers mopeds up to 200cc with their add-on, while their $3,000 electronics limit (vs $1,000 elsewhere) properly covers your camera and laptop. For Japan's expensive medical system, unlimited coverage is crucial.
USA & Canada: American medical costs are astronomical - a broken leg can cost $100,000+. While others cap at $20 million, SCTI offers unlimited medical coverage for non-terrorism events. Their cancellation coverage, up to unlimited, is vital when US trips often cost $ 10,000 or more per family.
Europe & UK: Lost luggage in Europe is a common occurrence for claims. SCTI's $25,000 coverage means you're actually protected, not just partially covered. Their clear, plain English policy also helps when dealing with claims from overseas.

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Why MoneyHub Founder Christopher Walsh Personally Uses Southern Cross Travel Insurance - And Why It's Worth Your Attention:

I've used Southern Cross Travel Insurance for every overseas trip I've taken in recent years - from the USA and Switzerland to Thailand, Spain, Japan and plenty of destinations in between. I don't use it because MoneyHub has a relationship with them. I use it because when I compared every major insurer line by line, SCTI's coverage was consistently stronger where it matters most.

Three things set SCTI apart:

It's one of the most competitive options for travellers aged 70+. Many insurers either refuse cover, load premiums aggressively, or strip back benefits for older travellers. SCTI prices fairly and doesn't gut the policy - you still get the same unlimited medical cover and $25,000 luggage protection regardless of age. Our guide to Over 70s travel insurance explains more.
Pre-existing medical conditions don't automatically disqualify you. SCTI offers a straightforward medical assessment process that can extend cover to pre-existing conditions. Other insurers either exclude them outright or charge eye-watering premiums. If you or someone you're travelling with has a medical history, SCTI should be your first quote, and our guide to pre-existing conditions travel insurance explains more.
Their multi-trip policy is hard to beat for frequent travellers. If you travel more than twice a year, an annual policy eliminates the hassle of buying cover each time - and SCTI offers an additional 5% discount for existing Southern Cross Health Society members. The coverage remains comprehensive across every trip, not watered down like some annual policies we've reviewed.

My view: I've never had a reason to switch insurers, and I've looked. SCTI is popular with MoneyHub readers who routinely share their positive experiences. I suggest getting a SCTI quote.

Christopher Walsh
MoneyHub Founder

Why Do I Need Travel Insurance?

Each year, many travellers gamble by embarking on journeys without insurance. While this may seem like a money-saving measure, it can result in hefty costs if things go wrong. The question isn't so much whether you need travel insurance, but rather, which travel insurance is best suited to your needs.
Even though we all hope for a trouble-free travel experience, travel is not without its risks and unforeseen incidents can occur. Over $100m is paid out every year in travel insurance claims from New Zealanders. This considerable figure is largely attributed to the costs of medical emergencies abroad, which can be exorbitant. For example, medical repatriation from the USA to New Zealand can cost up to $500,000. Hence, safeguarding your trip against such eventualities is essential.
Per this historic 2019 NZ Herald article, "many overseas hospitals, including in parts of the United States, required up-front payments before starting treatment. This could be problematic for someone who didn't have insurance".
Travel insurers pay out a lot of their policy revenue in claims - the 2024 financial statements of Southern Cross Travel Insurance illustrated that their claims team paid out around $71 for every $100 in policy revenue in 2024, and around $89 in 2023. This means that lots of people make claims, and the claims are high value.
SafeTravel.govt.nz, the government's travel advisory department, makes it clear - If you can’t afford travel insurance, you can’t afford to travel. We agree with this statement.

Southern Cross Travel Insurance Claims Costs 2024 and 2023

Is Travel Insurance a Legal Requirement? What are My Options?

Travel insurance isn't legally mandatory, but many New Zealanders get into serious financial trouble when they're overseas and find themselves unable to pay for medical costs in the event of an accident or illness.
For this reason, travel insurance is always advised with the government's Safe Travel website making it clear with a "if you can’t afford travel insurance, you can’t afford to travel" advisory. We agree with this outlook given the near-unlimited costs that face travellers who have medical emergencies overseas.

The questions, responses and tips below are designed to grow an understanding of travel insurance and its benefits:

What Kind of Travel Insurance Do I Need?

Choosing the right travel insurance depends on several factors, including your destination, trip duration, age, health status, planned activities, travel frequency, and the number of travellers. It's crucial to assess your specific needs before choosing a policy. Our travel insurance comparison has more information.

How Much Travel Insurance Do I Need?

Again, this depends on your specific circumstances. Factors such as the healthcare costs in your destination, your luggage value, the cost of your trip, and any special activities you plan to engage in can all influence the amount of coverage you'll need.

Does Travel Insurance Cover My Possessions?

Most travel insurance policies provide cover for lost, stolen, or damaged personal belongings. However, these policies often come with conditions and limits, so it's crucial to read the policy document carefully to understand what's covered and what isn't.

What Else Does Travel Insurance Cover?

Apart from medical expenses and personal belongings, travel insurance policies may also cover trip cancellations or curtailments, travel delays, personal liability, and sometimes even COVID-19 related incidents. It's always important to read the terms and conditions of your policy to know what's covered.

What Typically Isn't Covered by Travel Insurance?

Most travel insurance policies won't cover accidents under the influence of drugs or alcohol, undeclared pre-existing medical conditions, natural disasters, or acts of terrorism. Always read the policy exclusions to know what isn't covered - our video below explains what you need to know by looking at three policies and their respective exclusions:

Do I Need Extra Cover for Adventure Sports?

If your travel plans include adventurous activities, you may need additional coverage. Not all sports or activities are covered under standard policies, so it's essential to check the policy details or consider a specialist insurance provider.

Where Can I Compare Travel Insurance?

We suggest using our travel insurance comparison as a starting point. You can also find a list of all New Zealand travel insurers in our directory.

Understanding the Claims Process

Knowing how to file a claim and what's required to support your claim is vital. Usually, you'll need to provide documentation like medical reports, police reports, or receipts. It's a good idea to familiarise yourself with your insurer's claims process before you travel. Our guide to travel insurance claims has more information.

Travel Insurance and Government Travel Advisories

It's essential to be aware of government travel advisories. Travelling to a destination against government advice can invalidate your insurance coverage. Always check the latest advisories from the New Zealand government's SafeTravel website.

Understanding Policy Excess

An excess (or deductible) is the amount you agree to contribute towards a claim. Choosing a higher excess can reduce your premium, but it also means you'll have to pay more out of pocket if you need to make a claim. Always make sure you understand how much your excess is before purchasing a policy - our excess guide explains more.

Travel Insurance Policy Types

There are many different types of policies and specific add-on coverage within policies, as outlined below:

1. Family and Group Travel Insurance

If you're traveling with a group or with your family, you might want to consider a group or family insurance policy. These policies can often be more cost-effective and convenient than purchasing individual policies for each member of your party.
However, make sure to check whether everyone's needs are covered under such policies.

2. Annual Multi-Trip Travel Insurance

If you travel frequently, an annual multi-trip policy could be a good fit for you. These policies cover all the trips you take within a year, with certain limits on the length of each trip. This can often be cheaper and less hassle than taking out a new policy for each trip, particularly if you travel often. Our multi-trip policy comparison has more information.

3. Specialised Cover for Senior Travellers

Older travellers may face higher premiums or exclusions due to age or pre-existing medical conditions. Several companies offer specialised policies for seniors to ensure they're adequately covered while travelling. Make sure to disclose all pre-existing conditions to your insurer to avoid any claim rejections. Our over 70s guide has more details.

4. Insurance for Electronic Devices
With more travellers carrying expensive electronic devices like smartphones, laptops, and cameras, it's important to check if these are covered under your policy. If not, you may need additional coverage, which you can add-on for a fixed fee at the time of getting a quote.

Do You Really Need Travel Insurance FAQs

Frequently Asked Questions

The information below is general in nature and we do not give any advice on specific policies. Our guide to comparing travel insurance covers everything you need to know about what's available.

How far in advance should I buy travel insurance?

The best idea is to ensure you're covered for cancellation or any unforeseen events leading up to your travel as soon as you've booked your trip (assuming your policy covers this).

Does travel insurance cover pre-existing conditions?

Many policies do not cover pre-existing conditions unless disclosed and agreed upon by the insurer, often for an extra fee. Our guide to pre-existing conditions has more details.

Can I buy travel insurance after I've started my trip?

Some insurers allow you to purchase insurance after your trip has started. Still, the cover usually only begins a few days after the purchase and won't cover events that have already happened.

Is the cheapest travel insurance the best option for me?

The cost should not be the only factor when choosing travel insurance. Ensuring the policy covers all your needs and potential risks is more important. Cheap policies often have limited coverage and high excesses.

Do I Need Specialised Travel Insurance for a Cruise?

Yes. Cruise travel often requires specialised coverage due to unique risks such as missed port stops or medical treatment while at sea; our guide to cruise insurance has more details.

What Happens If I Don't Buy Travel Insurance?

Travelling without insurance can leave you exposed to a variety of financial risks, including high medical bills, trip cancellation costs, and loss of personal belongings.

Do I Need Travel Insurance for Travelling Within New Zealand?

Domestic travel insurance can be beneficial even if medical coverage isn't required, given the universal healthcare system in New Zealand. It can provide coverage for trip cancellations, lost or damaged luggage, and other unexpected costs. Our guide to domestic travel insurance has more details.

$25,000 luggage coverage (vs $10,000 from most competitors) - that's 2.5x more protection for your valuables
Unlimited cancellation option available - the only major insurer offering this level of flexibility - $2,500 to unlimited for each person, with the option to pay a premium for unlimited coverage
Plain English policy with WriteMark certification - you actually understand what you're buying
Higher individual item limits - $3,000 per item per person for electronics (up to a maximum of $10,000 for all unspecified mobile phone, laptops, personal computers, tablets and cameras, including related accessories with depreciation applying)
Automatic pregnancy coverage up to 24 weeks excluding common pregnancy symptoms and pregnancy complications experienced in the 3 years prior to buying the policy

Takes 1-2 minutes online
Clear pricing with no hidden exclusions
14-day cooling-off period if you change your mind

Australia & Pacific Islands: Medical emergencies in Australia aren't fully covered by reciprocal agreements, leaving you with gaps. In Fiji or Rarotonga, medical evacuations can cost $50,000+. SCTI's unlimited medical coverage and superior luggage limits ($25,000 vs competitors' $10,000) make them essential for Pacific travel.
Asia (Bali, Thailand, Japan, etc.): Motorbike accidents and theft are real risks in Southeast Asia. SCTI covers mopeds up to 200cc with their add-on, while their $3,000 electronics limit (vs $1,000 elsewhere) properly covers your camera and laptop. For Japan's expensive medical system, unlimited coverage is crucial.
USA & Canada: American medical costs are astronomical - a broken leg can cost $100,000+. While others cap at $20 million, SCTI offers unlimited medical coverage for non-terrorism events. Their cancellation coverage, up to unlimited, is vital when US trips often cost $ 10,000 or more per family.
Europe & UK: Lost luggage in Europe is a common occurrence for claims. SCTI's $25,000 coverage means you're actually protected, not just partially covered. Their clear, plain English policy also helps when dealing with claims from overseas.

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Travel Insurance Comparisons:

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