The Australian Securities and Investments Commission (ASIC) has also encouraged Australians to check the fine print when shopping around for travel insurance this holiday season.

“Whether you’re planning to bungee jump in New Zealand, trek in Nepal, take on the legendary surf at Ulu Watu in Bali, or simply lie on the beach on the Sunshine Coast, make sure you’re familiar with the terms and conditions of your insurance policy in case the unexpected happens,” Executive Director of Consumer Protection Greg Tanzer said.

About 15% of all complaints to the Insurance Ombudsman in 2003/04 were about travel insurance, and the most common reasons for denial of claim concerned lost and unattended luggage and pre-existing medical conditions.

While a travel insurance policy will usually cover events such as personal injury, loss or theft of possessions and costs incurred if your travel plans are disrupted, Mr Tanzer says people should understand the policy “will also contain a number of exclusions”.

“It’s important people read the fine detail about policies, and if in doubt, ask their insurer about how these policy exclusions work in practice.”