travel insurance is one of those necessary evils for international travel, particularly to countries where there are no reciprocal rights for healthcare treatment
a hospital treatment requirement in the USA may be VERY expensive, and for this reason travel insurance providers are VERY careful about what they will pay for, and will be quick to find a way of not paying if there is a way out of it such as a pre-existing condition which you have not disclosed or paid for, or which is excluded.
travel agents often take large commissions (~50%) when they sell you travel insurance, so if you can bypass them, your costs should go down.
if a non-approved pre-existing condition results in hospitalisation, or you get drunk, or indulge in high risk activities then travel insurance will not save you from being made bankrupt if you run into problems.
your luggage may not be covered if you do not report theft to police within 24 hours and get a police statement, nor will it be covered if you leave it unattended or in high risk places such as cars or checked in baggage.
check maximum cover per luggage item:
unspecified cameras or lenses are covered to $2000 or $3000 maximum depending upon cover as long as you have the original receipts (reimbursement may be repair costs or purchase price less wear and tear depreciation) - if your item is more than this, you need to specify it and its value at the time you are making the cover (this may add 2% (Southern Cross) or 4% (Medibank which also excludes jewellery) of its value to the premium, and you may need to provide proof of ownership or a valuation prior to any claim but generally depreciation is not subtracted from reimbursement)
you may have some travel insurance coverage if you paid for your holiday with certain credit cards (eg. AmEx), and if you purchase your own travel insurance, this insurer may try to have your claim processed through your credit card insurer.
you must read their Product Disclosure Statements (PDS) carefully:
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seems you need to purchase at least $500 of your travel with the card before you go to be covered AND You must be fit to travel and not be aware of any circumstance which could lead to cancellation or disruption of your overseas journey.
overseas medical expense insurance not applicable for pre-existing conditions or if aged > 75yrs and only cover $100/24hrs bed care costs
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most will exclude high risk activities such as professional sports, parachuting, mountaineering using ropes, scuba diving, motor cycling, alcohol or drug-related events, sexually transmitted diseases, illegal activities, and deliberately exposing yourself to danger (unless it is to preserve life)
most will exclude terrorism (although Southern Cross is kind enough to include costs in returning your body to Australia)
most exclude kidnapping ransoms (although Southern Cross includes it, but not in high risk countries such as central and southern America)
personal liability only if you have not admitted fault or liability AND legal liability is proven in an Australian court or court of the country in which it occurred AND there are no exclusions (eg. vehicle or firearm involved, work-related, criminal acts, whilst intoxicated, etc).