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Aussie travellers out of pocket as travel insurers don’t pay out.

A recent study has revealed that Australian travellers are often left out-of-pocket as leading insurers don’t pay out.

Is your smartphone REALLY insured? Is your smartphone REALLY insured?

Is your smartphone REALLY insured? Better check your policy – according to new research it may not be.

Compare Travel Insurance (CTI) investigated 20 of Australia’s leading travel insurance brands and discovered that travellers can expect to lose out on at least $500 if making a claim for an Apple iPhone purchased over 12 months ago for example*.

(*Based on a new iPhone costing $799, less the average*excess of $107.89 and the applied estimated depreciation*of 50%).

Travellers could lose out further if signed into long-term contracts on monthly plans with mobile phone providers unless they provide documentation from the provider showing the payout figure for the phone.

What’s more is that insurance companies require proof of ownership for the mobile device and if travellers have not yet paid for the phone in its entirety (at the end of a standard 2 year contract), the insurance provider may not pay out at all.

Compare Travel Insurance has encouraged travellers to shop around and read the small print.

Even though your insurer might say it will cover you to the value of $10,000 for lost, stolen or damaged items, there will be a per item sub-limit, and in the policy document you will probably find the words:

"Depreciation will be applied to claims for lost luggage and personal effects as reasonably determined by the insurer."

American Express was the only insurer out of all 20 that offered ‘new for old’ replacement on a mobile phone.

Media spokesperson for Compare Travel Insurance, Natalie Ball said; “Most travellers carry a smartphone these days.  It’s the quickest way to snap and share your holiday moments with friends. Travellers shove them in their pockets, throw them into their bags and drop them without too much concern – but a standard travel insurance policy won’t cover the cost to replace it.

“Insurers will usually depreciate the value of any item you claim, so travellers need to get smart about their travel insurance. If you're planning on taking your smartphone abroad, consider adding it as a specific high value item so that you’re not left out of pocket; or take an old phone with you instead”.

The devil is in the detail – what you need to know:

  • 9 out of 20 of the insurance providers’ “single item limit” was less than $750.
  • 19 out of 20 of the insurers when calculating the amount payable would apply ‘reasonable’ depreciation due to age, wear and tear determined by the insurance provider for unspecified items.
  • 19 out of the 20 providers allow travellers to increase their ‘single item limit’ by specifying items and paying an additional premium.
  • The average maximum limit for increased “single item” cover was $6,900.
  • Nearly all of the companies had an excess fee of $100, the highest was $150 from Virgin Money.
  • The average* ‘maximum limit cover’ for Luggage and Personal Effects was $10,550 with the lowest total cover from iTrek, 1Cover and Down Under Insurance at $5,000 and the highest from Southern Cross at $25,000.


  • The lowest ‘single item limit’ we found was from Qantas at $400 for ‘each other item’, $500 for watches and jewellery and $1,000 for personal computer, camera and video items, with a $100 excess payment. Travellers can expect to be $499 out of pocket on this policy based on a new iPhone costing $799, the single item payout of $400, excess of $100 and the applied estimated depreciation* of 50% on payout.


  • The highest ‘single item limit’ was from InsureandGo at $3,000 for laptops, tablets, cameras, video cameras and mobile phones, with a $100 excess payment. Insurers will never pay more than the item was originally worth and based on this travellers can still expect to be $299.50 out of pocket. This is based on an iPhone costing $799, excess of $100 and the applied estimated depreciation* of 50% on payout.
  • CTI also looked into the cost of a quote for a 10-day trip to Bali for one person aged 40. The average comprehensive quote was $62.00. Best value for money was Down Under Insurance ranking cheapest at $42.05 for the policy with a ‘single item limit for mobile phones’ capped at $1,000. The most expensive and worse value was Qantas at $116.00 for the policy with a ‘single item limit for mobile phones’ capped at just $400.

Top Tips:

  • Shop around and know the details of your policy.
  • Check limits and any excess that applies; the cheapest isn’t always the best option for your trip. 
  • Assess what items you’re taking away with you and specify any high value items you must take.
  • Be sensible and keep your wits about you when you travel!

What you won’t be covered for:

  • Travellers are not covered if they leave their belongings unattended or if belongings are out of reach
  • Travellers are not covered if they do not report the loss, theft within 24 hours with a full written report
  • Some insurance companies will not pay any claim relating to a mobile phone (or device with phone capabilities) if you are unable to supply the IMEI (International Mobile Equipment Identity)
  • Travellers are not covered if they cannot prove the device belongs to them with an original receipt. Photocopied, faxed or scanned documents will not be accepted
  • Some insurance companies will not pay if mobile phones, computer equipment, or jewellery is left unattended in a motor vehicle at any time
  • Travellers are not covered if driving a vehicle they are not licensed to drive a motorcycle in Thailand
  • Travellers are not covered for any claim where alcohol or drugs is a contributing factor

20 Insurance providers were included in this survey: 1Cover, Amex, Australia Post, Columbus Direct, Cover-More, Down Under Insurance, Fast Cover, Good2Go, Insure4Less, InsureandGo, iTrek, KangoCover, On Tour, Qantas, Simply Travel Insurance, Southern Cross, Travel Insurance Direct, Travel Insuranz, Virgin Money, Woolworths.

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Written by: Deborah Dickson-Smith
Published: 4 June 2013

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