Rising Domestic Travel Insurance Claims
Southern Cross Travel Insurance (SCTI) has reported a significant increase in domestic travel insurance claims, both in frequency and payout size, approaching parity with international claims. Between May 1, 2024, and April 30, 2025, SCTI paid claims on 7.9% of its domestic travel policies, with an average payout of $1,170. In comparison, the average payout for international claims during the same period was $1,466.
Common Scenarios and Cost Insights
While domestic travel policies are generally less expensive than international ones, SCTI’s data revealed that they can still result in substantial claims. For instance, a week-long domestic trip for an individual might be insured for $76.65, while a family of four could pay approximately $153.30. Significant domestic claims processed in early 2025 included medical cancellations due to serious health conditions, travel interruptions caused by severe weather, and complications from pre-existing conditions. Notable claims included a payout of $11,733 for hospitalization due to a pneumothorax, with others ranging from $6,000 to over $8,000.
Rental Excess Protection Adds Value
One feature attracting attention is SCTI’s policy rental car excess cover. In New Zealand, rental vehicles typically include basic insurance components. However, the excess – what the customer is liable to pay in the event of a claim – can range from $3,000 to $5,000. SCTI’s policy includes up to $6,000 to cover rental vehicle excess, potentially removing the need for additional coverage sold by rental companies. As of 2025, SCTI reported paying $42,000 in excess-related claims, averaging $1,300 per incident.
Shifting Attitudes in Travel Insurance
These figures reflect broader shifts identified in SCTI’s Future of Travel survey conducted in November 2024. The survey of 1,002 New Zealanders revealed that 73% are more likely to purchase travel insurance due to geopolitical instability, while 78% now see insurance as a key component of their travel planning. SCTI chief executive Jo McCauley noted that emerging global events have made risk management more prominent in consumers’ planning, stating, “Nearly 80% of the New Zealanders we surveyed indicated that the increase in conflict in many parts of the world has made them feel less secure and more inclined to take out travel insurance.”
The data underscores how local trips, often perceived as lower risk, can lead to substantial financial exposure when disrupted. As travellers become more aware of potential risks, the importance of comprehensive travel insurance, including domestic coverage, is gaining prominence.
