RACV data indicates that a substantial share of Australian travellers are arranging travel insurance only shortly before departure, raising implications for how insurers communicate the timing and scope of cover.
New internal insights from RACV show that 35% of travellers purchase travel insurance within seven days of leaving, and 5% wait until the day they travel. The company has also recorded an increase in policies bought within 48 hours of departure. From a product perspective, late purchases can affect access to some cancellation and disruption benefits, which in many policies apply only if cover is taken out shortly after bookings are made. RACV’s research suggests that many travellers are not fully considering this when planning trips.
According to the organisation, several factors contribute to the pattern. These include a perception that “it won’t happen to me,” a focus on booking flights, accommodation and activities first, limited understanding of how pre-trip benefits operate, and reluctance to navigate multiple policy options and fine print. For insurers, intermediaries, and underwriting agencies, the findings point to an ongoing need to explain how policy timing interacts with cancellation cover, pre-existing conditions, known events and other terms, and to direct customers to product disclosure statements (PDS) earlier in the booking process.
The high incidence of delayed, lost, and stolen luggage indicates that late purchasing behaviour may leave some travellers without cover for certain events, depending on policy terms. RACV’s latest polling suggests that baggage incidents are common for Australian travellers during busy holiday periods, adding to volumes handled by claims teams and airline processes and shaping customer expectations. In a survey of more than 1,200 respondents, 61% reported having delayed or damaged luggage that was eventually returned. Another 26% said they had experienced lost luggage, and 13% reported luggage that was stolen and not recovered.
As Melbourne Airport prepares for more than 4.8 million passengers over the December–January period, RACV has issued guidance for travellers on managing lost, delayed, damaged, or stolen baggage and on the interaction between travel insurance benefits and airline compensation. RACV executive general manager leisure Craig Peachey said: “RACV recommends travellers keep valuables in carry-on luggage whenever possible. Importantly, passports, credit and debit cards, medications, and smartphones should remain on your person to avoid potential fraud or identity theft.”
The guidance advises travellers whose bags do not appear on the carousel to first recheck the area and other carousels, and to use any available airline tracking tools. If luggage is still missing, RACV recommends:
Travellers are encouraged to ask about support for essential items or allowances where available. Peachey added: “Before you leave, take photos of your luggage items and create a detailed list of what you’ve packed. This simple step can make the claims process significantly easier if something goes wrong.”
For damaged bags, the guidance is to:
In theft cases, travellers are advised to report to local police and relevant operators, such as airports or hotels, and keep copies of all reports.
RACV is also drawing attention to Department of Foreign Affairs and Trade (DFAT) data on passport security. In the 2023-24 financial year, 1,942 Australian passports were reported stolen overseas and 2,678 reported lost, a 28% increase on the previous year. Italy, the US, and the UK were among the locations most frequently associated with lost or stolen Australian passports.
RACV’s guidance recommends that travellers keep passports in a secure place, such as a hotel safe or locked suitcase, and carry them only when necessary. A separate photo or photocopy of the passport photo page can assist with replacement processes if the original is lost or stolen. If a passport goes missing overseas, travellers are advised to contact the nearest Australian embassy or consulate and to lodge a report with local police, retaining a copy for replacement applications and any insurance claim. Replacement passports currently cost $412 for adults, with possible overseas surcharges of $184, and repeated losses within five years may attract penalties.
RACV’s latest research and guidance are being used to illustrate how travel insurance responds to baggage and disruption events and how claim outcomes are influenced by purchase timing, benefit limits, and compliance with policy conditions. The organisation notes that many travel policies may cover reasonable repair or replacement costs for lost, damaged, or stolen luggage, and may reimburse essential items bought while bags are delayed, subject to limits, exclusions, and evidence such as airline reports and receipts.
For insurers, underwriters, and brokers, the material points to communication gaps around the timing of purchase, the overlap between airline or operator compensation and insurance, and documentation requirements for baggage and passport-related claims. These areas are likely to remain in focus as outbound travel volumes increase and peak-season disruptions continue to test customers’ understanding of cover and claims processes.
