Australian travellers are less likely to purchase travel insurance for trips within the country compared to overseas journeys, according to new data from Southern Cross Travel Insurance (SCTI).
While 76% of Australians consider travel insurance essential for international holidays, only 41% apply the same priority to domestic travel.
This trend persists even though SCTI’s claims data shows that domestic insurance payouts are, on average, higher than those for international claims.
Between June 2024 and May 2025, SCTI reported that 6.34% of policyholders with domestic travel insurance filed a claim, with the average payout reaching $2,003.
In contrast, 9.34% of those with international comprehensive policies made claims, but the average payout was lower, at $1,752.
The figures suggest that while fewer domestic claims are made, the financial impact per claim is greater.
SCTI’s chief customer officer, Jess Strange, stated that many travellers underestimate the risks of domestic trips, often assuming that Medicare will cover all medical incidents.
However, she pointed out that travellers may overlook the potential financial losses from trip cancellations or disruptions caused by medical issues.
“Many Aussies believe they don’t need insurance when travelling domestically as they would be covered for medical situations under Medicare. However, many travellers don’t take into account the amount of money they may lose having to cancel a trip due an unexpected medical situation,” she said.
SCTI highlighted several recent cases to illustrate the potential costs of domestic travel disruptions.
One family was reimbursed over $28,000 after illness forced them to cancel a trip that included rail, cruise, and island excursions.
Other claims included a $20,512 payout for a cancelled Kimberley tour due to dental issues, and more than $21,000 for a trip called off because of a gastric condition.
Additional claims covered cancelled holidays due to car breakdowns, respiratory infections, and other medical emergencies.
Strange said that the average domestic claim exceeded international claims by $250 during the review period, reflecting the high costs associated with local travel and accommodation.
“It’s important to understand how expensive domestic travel and associated claims can be,” she said.
She added that the price difference between domestic and international claims is narrowing, especially as domestic travel expenses remain elevated.
A notable feature of SCTI’s domestic travel insurance is its coverage for rental vehicle excess, up to $6,000.
This benefit can offset the need for additional excess reduction products from rental companies, which may cost between $40 and $71 per day.
In 2025, SCTI paid out over $43,000 in rental car excess claims, with the average claim amounting to $1,163.
For a family of four, a week-long domestic policy costs about $146.60, or roughly $18 per day, and includes coverage for trip changes, cancellations, and illness.
The SCTI findings align with the Allianz Partners Travel Index, which surveyed 1,000 Australians.
The index revealed that 71% of respondents plan to travel in the next year, but affordability remains a barrier for many, with 80% of non-travellers citing cost as the main reason.
Australians expect to spend between $5,000 and $10,000 per trip, and younger travellers are more likely to budget over $10,000.
Travel insurance remains a key consideration, with 82% of survey participants indicating they intend to purchase coverage.
The main concerns are medical emergencies, financial losses during travel, and disruptions such as flight cancellations.
The survey also found that women are more likely than men to report these concerns.
