The recent volcanic eruption on Bali, a favourite destination for many New Zealanders, has shown how unexpected natural disasters can interfere with your travel plans.

It's important to be prepared for the unexpected and understanding your travel insurance policy is the best way to make sure you're covered if everything goes wrong, according to the Insurance & Financial Services Ombudsman, Karen Stevens.

"During Bali's Mt Agung eruption, many stranded travellers were even more stressed to discover they had no insurance cover," Stevens says. "This is a really unfortunate situation and we feel for these people."

"But there has been some misinformation about why they are uninsured. Put simply, insurance exists to cover unexpected losses," she says. "If you buy travel insurance after a natural disaster is widely known about and travel warnings have been issued, insurance is unlikely to provide you with any cover."


The following checklist aims to help future travellers get the best value from their travel insurance, should anything unexpected happen.

Summer travel checklist

1. Purchase insurance as soon as you book and pay for your tickets

This ensures you get the best value out of your insurance, and the benefit of cancellation cover should anything unexpected go wrong – at home or your destination – and you have to change plans. Likewise, if you buy insurance after travel warnings have been issued about an imminent disaster, it's unlikely you will be covered.

2. Read and understand your policy, including exclusions and limitations

Travel insurance is often purchased online, through a travel agent, or comes as a credit card benefit. Get a copy of your policy and read it. Limitations on credit card insurance, such as time limits and age restrictions, catch people out, as do monetary limits on valuable items.

3. Tell your travel insurer about your health conditions

Include all health conditions and symptoms you know about. Most often, you will not be covered for any pre-existing conditions, unless the insurer has accepted them in writing and charged you an extra premium.

4. Take care of your valuables and bags

Taking reasonable care is a standard insurance requirement. Most insurance policies specifically exclude cover for personal items left unattended in a public place, including beaches, backpacker hostels and airports.

5. Take extra care of jewellery and valuable items

Insurance policies will often have specific conditions for valuable items. Claims can be declined because jewellery was stolen or lost when it was not "worn or carried" on the person, or valuable items are checked-in rather than carried on to the plane.

6. Report incidents immediately

Contact the police and your insurer as soon as you can. Travel policies will specify the required timeframe, usually it is 24-hours, and often provide an emergency helpline. Insurers are likely to ask for copies of police reports, together with receipts, and proof of ownership of stolen items.