The United States remains a prominent source of high-cost medical claims for Australian travel insurers, with Zoom Travel Insurance reporting that the country featured in four of its five largest claims in 2025.
According to Zoom, its largest claim for the year exceeded $1 million after an Australian traveller suffered a brain aneurysm while in the US. Other large claims involved septic shock requiring intensive care, a tuberculosis diagnosis, and a fall that resulted in hip and wrist fractures requiring surgery.
All of these cases required emergency admission and ongoing hospital treatment. Zoom said the cost profile reflected private healthcare pricing, specialist fees, and length of hospital stays in the US. The only non-US claim in the insurer’s top five related to a traveller hospitalised with a lung infection in Switzerland, at a lower overall cost than the largest US case. “We’ve always known the United States is an expensive place to receive medical care. But this year’s claims really emphasise just how high the stakes can be,” Natasha Sullivan, marketing manager at Zoom, said. She said the claims experience illustrated the exposure for Australian travellers without sufficient protection. “Each of these incidents were significant, potentially life-threatening medical events. Without comprehensive travel insurance, the potential financial burden in countries like the US can be debilitating for the average Aussie traveller,” she said.
Research from Southern Cross Travel Insurance (SCTI) indicates that travellers in Australia and New Zealand are re-evaluating travel patterns, with flow-on effects for working holidays, destination risk assessment, and insurance purchasing behaviour. SCTI’s fifth Future of Travel study, conducted in November 2025, surveyed 1,008 Australian adults and a parallel sample in New Zealand. In the New Zealand data, one notable change was a decline in interest in long-term overseas work stints. Among Gen Z respondents, interest in extended work-abroad trips fell from 75% in 2024 to 55% in 2025.
Jess Strange, chief customer officer at SCTI, linked the shift to tighter labour markets in traditional hubs and the realities of remote working lifestyles. “There has been a fair bit of media coverage, let alone anecdotal chat, of it being difficult to secure jobs in a traditionally favoured market like London,” Strange said. She noted that some destinations – including Portugal, Japan, Indonesia, and Malaysia – have offered visas for digital nomads, but said “economic realities, workplace shifts, and the practical challenges of living and working overseas have become clearer and may well be forcing travellers to rethink their plans.”
SCTI’s research also shows that the US features prominently among destinations respondents say they are now less likely to visit. In Australia, 35% of respondents said there are destinations they are less likely to visit over the next few years. Within this cohort, 51% said they were less inclined to travel to the US. The Middle East (36%) and China (28%) were also frequently named, while about two in 10 respondents cited Indonesia, which has historically been a popular destination for Australian holidaymakers.
Strange said the responses underline the importance of understanding how entry requirements interact with policy terms. “Travellers’ concerns are understandable, and it’s important to understand how things like border entry policies may affect travel insurance cover. If you travel without the correct visas or paperwork, or you are declined entry due to a government policy, it’s highly unlikely changes to your journey will be covered by insurance. You’ll be required to fund your own itinerary changes and those don’t come cheaply. Travel insurance is there for unexpected events – so making sure you have everything in place to secure entry is your responsibility,” she said.
For the Australian market, SCTI’s study suggests that cost-of-living pressures are influencing both destination selection and insurance behaviour. Among Australians planning to travel overseas, 62% said rising living costs had changed their arrangements. Half of this group reported shifting from peak to off-peak periods, 31% said they were choosing low-cost carriers or cheaper fares, and 28% planned to reduce spending on dining and entertainment while travelling. A share of respondents are also travelling with reduced protection. Fourteen per cent (14%) of Australians surveyed said they went overseas without travel insurance in 2025, rising to 19% among those aged 18 to 29.
Strange said such choices can translate into substantial out-of-pocket costs. “We’re seeing Australians make smart trade-offs to manage rising living costs, while still making the most of their holidays. But skipping travel insurance shouldn’t be one of them. Medical care, travel cancellations, and disruptions can be incredibly costly, and travel insurance remains an useful safeguard for travellers no matter how big or small your trip is,” she said. When Australians choose to spend more, SCTI’s data indicate that additional funds are often directed to extra nights, added destinations, shopping, higher-end or boutique accommodation, and higher-cost activities, all of which can elevate claim values when disruptions or medical events occur.
Both Zoom and SCTI report that medical issues continue to be the primary driver of large claims, with infections, cardiovascular incidents, and accidental injuries recurring across portfolios. Growth in snow-related travel and cruising is contributing to this pattern. Zoom has observed that increased winter sports travel to Japan, North America, and Canada has coincided with more injury-related claims, prompting reminders to ensure policies include appropriate snow sports cover when required.
Cruise travel is another area of significant medical exposure for SCTI. “While cruising is increasingly popular, it’s super important to note that should you fall ill while cruising on the Danube, along Alaska’s coastline, or circumnavigating the Bahamas, you will quite likely endure excessive charging for healthcare,” Strange said. She added that SCTI “regularly receives very expensive claims for medical care on board ships – where practitioners often charge US style prices. From $300 for a dose of paracetamol to thousands of dollars for drips, infection control, and small procedures, if you don’t have travel insurance cover while cruising the seven seas, you'll likely be seriously out of pocket.”
Japan remains a key focus for Australian travellers and insurers. In SCTI’s Australian survey, 31% of respondents nominated Japan as their preferred destination over the next 12 months, ahead of Europe, New Zealand, the US, Southeast Asia, and the UK. SCTI reported paying more than $316,000 in claims linked to Japan in 2025, with an average claim size of $1,251. Medical treatment and evacuation together accounted for $259,411.
The largest Japan-related claims included $28,822 for a traveller hospitalised with gastrointestinal issues, $18,302 for a leg fracture following a slip and $17,867 for another leg fracture. “Medical issues and simple trips or falls are some of the most common and costly claims we see overseas. What might be a minor incident at home can quickly turn into thousands of dollars in medical bills abroad, particularly in countries like Japan. That’s why travel insurance should always be treated as a non-negotiable part of any trip,” Strange said.
The combined findings from Zoom and SCTI point to a market in which the US continues to generate high-severity claims, even as some travellers say they are less likely to visit, and where cruise and snow exposures are shaping loss experience. At the same time, some cost-sensitive travellers are either foregoing insurance or buying lower levels of cover. Sullivan said the ongoing demand for international travel alongside high medical costs remains a key feature for the sector. “Travel is one of life’s great joys. But no one plans to wind up in hospital abroad. These cases show why having the right level of cover, especially when travelling to high-cost countries like the US, is absolutely critical,” she said. The data indicate a need to review product settings, pricing, and communication strategies around high-cost destinations, visa and entry compliance, winter sports and cruise itineraries, and younger travellers balancing travel plans with cost-of-living pressures.
