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Health Insurance vs Travel Insurance - The Definitive Guide for New Zealanders Heading Overseas

Our guide explains what Health Insurance covers and doesn't cover during overseas travel, why travel insurance is necessary for New Zealanders travelling and the impacts of being uninsured from real-life case studies. Our guide also explains misconceptions about Health Insurance and travel insurance and their overlap in domestic travel.
Updated 11 November 2024

Summary
  • There is a common misconception among some New Zealanders that Health Insurance covers you for all health-related incidents overseas. Unfortunately, this is not the case, and we've published this guide to explain the differences between the two very different policies.
  • While it may seem obvious that Health Insurance wouldn't cover all overseas incidents, many New Zealanders travel uninsured (for many reasons), and some believe that their Health Insurance will pick up the bill if they incur hospital costs or need to be flown back to New Zealand.
  • Health Insurance covers the costs of medical and surgical expenses within New Zealand, but there are limitations to this coverage, and a policy does not usually cover incidents that occur internationally. Understanding these limitations is essential to ensure you purchase adequate travel insurance coverage abroad.
  • Health Insurance provides a valuable service, but it's not designed to replace travel insurance. It has significant limitations, particularly when it comes to international travel.
  • For this reason, only travel insurance allows New Zealanders to travel overseas without worrying about potential financial risks.

To make the limitations clear, our guide covers the following:
​Important: Do you need Travel Insurance? Too many New Zealanders take the risk and travel without it. Our Compare Travel Insurance guide helps you find affordable coverage from trusted insurers with a history of paying claims. We also compare by country to help you make finding what you need easier: 

What Does Health Insurance Cover (and Not Cover) When You're Overseas?

Health Insurance generally covers the following for treatment within New Zealand:
  • Hospital stays: Health insurance covers the cost of your stay at a hospital for medical reasons. This includes the cost of your room, nursing care, meals, and any treatments or procedures you receive during your stay.
  • Surgical procedures: This includes medically necessary operations, whether they're done in a hospital or an outpatient surgery centre. The coverage typically includes the surgeon's fee, facility fee, and anaesthesia costs.
  • Medications: Most health insurance plans include prescription drug coverage. This means they'll pay for a portion of the cost of medications your doctor prescribes. The out-of-pocket amount can vary depending on the specific drug and your insurance plan.
  • Doctors' visits: Health insurance covers visits to primary care doctors and specialists. This can include routine checkups as well as visits for specific health concerns.

Our view: It can be confusing; some health insurance policies talk about overseas hospital costs and medical treatments, but this usually refers to pre-approved surgery that can't be done in New Zealand or where it's faster to do it overseas. An example of how this looks can be found here, which is an extract from a standard AIA Health Insurance policy.

However, Health Insurance won't typically cover the following:
  • Non-medical emergencies or illness: Health insurance is designed to cover medical costs. Health insurance won't provide coverage if you encounter a non-medical emergency, such as lost or stolen property or travel disruption.
  • Overseas treatment costs beyond what would be covered in New Zealand: If you're a New Zealand resident and get medical treatment overseas, your health insurance may only cover the amount that the same treatment would cost in New Zealand. Any costs above that would be your responsibility.
  • Disrupted travel plans and lost deposits: Health insurance doesn't cover costs related to travel disruptions, such as a cancelled flight or lost deposits for travel arrangements. These situations would be covered by travel insurance.
  • Assisted travel or emergency travel for a relative: If you become ill or injured overseas and need a family member to travel to be with you, health insurance won't cover your travel costs.
  • Non-working spouses or dependents, if they are out of New Zealand for over six months: Health insurance coverage often has residency requirements. A non-working spouse or dependent outside New Zealand for more than six months may lose their health insurance coverage.

The limitations of Health Insurance when travelling overseas:

Health insurance offers limited coverage when you're overseas. For example, it may cover emergency medical care but typically does not cover the full range of services and situations that can arise when you're travelling. Specifically:

Health Insurance Does Not Cover All Medical Emergencies Overseas
  • While health insurance may cover some medical emergencies overseas, the coverage is often limited and can vary greatly depending on your plan. For example, it may not cover medical evacuation, which can be extremely expensive.

Health Insurance Coverage is Limited Overseas
  • Health insurance plans typically provide less coverage overseas than they do at home. For example, they may only cover emergency care and may not cover things like routine care or prescription drugs. You may also have to pay out-of-pocket and get reimbursed later.

Health Insurance Does Not Cover Additional Travel Expenses
  • If you get sick or injured while travelling and incur additional travel expenses as a result, such as having to book a last-minute flight home, these costs would not be covered by health insurance.

Health Insurance Does Not Cover Losses Due to Cancelled or Delayed Trips
  • If you have to cancel or delay your trip due to illness or injury, any financial losses you suffer as a result, such as non-refundable deposits or additional accommodation expenses, would not be covered by health insurance.

Health Insurance Does Not Cover Lost, Damaged or Stolen Property
  • If your luggage or personal belongings are lost, damaged, or stolen while travelling, your health insurance won't provide coverage. This is typically covered by travel insurance.

Health Insurance Does Not Cover Personal Liability
  • If you cause injury to someone else or damage their property while you're travelling, health insurance would not cover any liability you incur. Personal liability coverage is typically included in travel insurance policies.
  • Remember that individual health insurance policies can vary, so reviewing your coverage carefully and speaking to your insurer if you have any questions is important.

Case Studies - Health Insurance vs Travel Insurance

  1. Medical Emergency Abroad: Joe travelled to Europe for a two-week holiday. Unfortunately, he slipped on a wet floor and broke his leg. His health insurance did not cover the cost of treatment overseas, which led to a significant out-of-pocket expense for Joe. If he had travel insurance, his treatment cost, ambulance ride, hospital stay and possibly even an earlier or special return flight could have been covered.
  2. Lost Luggage: Sarah flew to Japan for a business trip. Upon arrival, she discovered that her luggage had been lost. Unsurprisingly, her health insurance did not cover the cost of replacing her belongings. However, if she had travel insurance, it could have provided a certain amount of coverage for her lost possessions.
  3. Workplace Injury Abroad: Mark was on a short-term assignment for his job in Canada. He got injured at the workplace. His health insurance provided only limited coverage on his return to New Zealand due to it being an international incident. If Mark had a travel insurance policy that covered work injuries abroad, he could have saved a substantial amount on medical bills.

Must-Know Health Insurance-Specific Misconceptions - Avoid Being Uninsured by Knowing a Typical Health Insurance Policy's Limits

Does Health Insurance cover me for all medical emergencies while travelling overseas?:

Not usually. Many health insurance plans don't cover medical expenses outside New Zealand. Some offer limited coverage, but travel insurance is typically less comprehensive.

If I get injured while travelling, will Health Insurance cover my medical expenses?

This depends on your specific health insurance policy, but generally, health insurance provides limited, if any, coverage for injuries sustained while travelling internationally. For this reason it's unwise to rely on it without checking the specifics of your health insurance policy.

What additional costs might I incur if I get injured while travelling overseas, and does Health Insurance cover these?

If you're injured overseas, you might need an air ambulance or medical repatriation, which can be very costly and typically are not covered by standard health insurance.

What if I need to cancel my trip or it gets delayed? Does Health Insurance provide any coverage for this?

No, health insurance does not usually provide coverage for trip cancellation or delay. This is where travel insurance comes into play.

What if I cause harm or damage to someone else or their property while travelling overseas? Does Health Insurance cover personal liability claims?

No, health insurance does not typically cover personal liability claims. Personal liability would usually fall under travel insurance.

Domestic Travel Insurance vs Health Insurance - Is There Overlap?

Generally there is no overlap - common queries below make this clear:

Do I need domestic travel insurance in New Zealand if Health Insurance already covers me?

Yes, because health insurance may not cover trip cancellations, lost luggage, or personal liability. It's important to read the terms and conditions of your health insurance policy to understand exactly what is and isn't covered.

Does Health Insurance cover cancelling domestic trips within New Zealand?

No - such cover is typically found in travel insurance policies.

If my personal belongings are stolen during my trip to New Zealand, is it covered by Health Insurance?

No, theft of personal belongings would not be covered by health insurance. Travel insurance often includes coverage for stolen or lost belongings.

Frequently Asked Questions

Do I need travel insurance if I have health insurance?

Yes, travel insurance covers many things that health insurance does not, such as trip cancellation, lost or stolen luggage, and emergency travel services.

Does travel insurance cover pre-existing medical conditions?

Some travel insurance policies may cover pre-existing medical conditions, but it's crucial to read the fine print or speak with the insurer to understand exactly what is covered.

Does Health Insurance cover medical evacuation costs from overseas?

Health insurance typically doesn't cover medical evacuation costs from overseas. Medical evacuation can be very expensive and is only usually covered by comprehensive travel insurance.

Does my health insurance cover me for overseas consultations with doctors?

No - Health insurance often doesn't cover consultations with doctors overseas unless pre-arranged as part of treatment organised with your New Zealand doctor or specialist.

If I fall sick overseas and miss my flight back to New Zealand, will my health insurance cover the costs?

No - health insurance does not cover the costs of missed flights due to sickness. However, these are typically covered under travel insurance policies, which can provide cover for additional accommodation and flight costs.

If I am hospitalised overseas and my trip extends beyond the planned return date, will my health insurance cover the extra costs incurred?

No - Health insurance usually doesn't cover additional travel or accommodation costs due to extended stays resulting from illness or hospitalisation. Travel insurance, however, often covers such eventualities.

Is mental health care received overseas covered by health insurance?

Health insurance coverage for mental health care can vary greatly, and it's even more complex regarding care received overseas. Some health insurance policies may cover emergency mental health care overseas, but it's important to check the specifics of your policy.

If my child falls sick while we're overseas, will my health insurance cover the treatment?

Health insurance may provide limited coverage for emergency medical care for your child overseas. However, it's important to note that coverage will depend on the specifics of your policy, and many health insurance plans do not provide comprehensive coverage for overseas treatment.

Remember, the specifics of health and travel insurance can vary significantly between policies and insurers, so it's essential to read all terms and conditions thoroughly and speak to your insurer if you have any questions before heading overseas.
​Important: Do you need Travel Insurance? Too many New Zealanders take the risk and travel without it. Our Compare Travel Insurance guide helps you find affordable coverage from trusted insurers with a history of paying claims. We also compare by country to help you make finding what you need easier: 
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