Insurers expect more Australians to take domestic travel cover

New data has shown a rise in Australians intending to purchase travel policies for domestic trips as the industry expects delays and disruptions to continue to affect flights throughout the year.

Survey findings from 1001 Australian travellers by travel insurer InsureandGo found that 68% of respondents intend to take up domestic travel policies to protect interstate trips.

InsureandGo says older Australians are most likely to take out a policy, with 70% of over-50 respondents saying that they planned to do so ahead of domestic travel.

The insurer says the data comes as the risk of the “once-reliable domestic holiday” increases, noting more frequent flight delays, cancellations, misplaced luggage and extreme weather events.

“Last year, many travellers were let down by the frequency of cancelled or delayed flights, ongoing flooding and natural disasters as well as patterns of lost or delayed luggage – mostly during peak holiday periods,” InsureandGo Chief Commercial Officer Jonathan Etkind said.

Data from the Bureau of Infrastructure and Transport Research Economics found that Australia’s major airlines managed just over 70% on-time arrivals and a 3.4% cancellation rate, a distinct worsening from long-time averages at around 81.6% and 2.1%, respectively.

InsureandGo says its survey also asked respondents about the value of travel insurance: 63% said they got value from cancellation cover, with lost luggage coming in second at 52%. 41% of respondents said they valued coverage for delayed flights, while 35% noted covid coverage as an important reason for travel insurance.

The data comes as research from Southern Cross Travel Insurance (SCTI) found that 58% of Australians who travelled interstate last year experienced issues with their travel plans, with airline-related problems most common.

The SCTI data, which comes from a YouGov survey of 1028 Australians, found that the average cost of a domestic claim was around $1584, which was higher than the average cost for an international travel claim of around $1281.

“With the cost to travel not showing any signs of reducing, it’s just not worth taking the risk and travelling without insurance either domestically or internationally,” SCTI CEO Jo McCauley said.