Explainer | 6 common insurance myths busted

When it comes to insurance, working out what you need and deciding what to buy can be tricky. We’ve noticed a bunch of common insurance myths that cause confusion. So, let’s separate the fact from the fiction and help set things straight for you.

Insurance myth 1: If I get injured, Medicare covers all my costs

In some cases, this is true. Medicare covers most essential treatments at public hospitals. But it generally doesn’t cover things like out-of-hospital dental, physio, optical or ambulance costs. Here are a few examples:

• If your GP doesn’t bulk bill, you’ll pay some of the cost of your consultation 
• If you want physio to recover from a muscle injury after you’ve left hospital, that’s often not covered by Medicare
• If you need an X-ray to check for a fracture and you’re not in hospital, you might have to pay for some or all of the cost (depending on why you need the X-ray and the where you go to get it done).

And if you get injured and need dental services, the costs can really bite. Imagine you fall face-first off your bike and knock out a tooth. You’d need to see a dentist (not covered by Medicare) and might have surgery to get your smile repaired (which wouldn’t be covered by Medicare in a lot of cases). 

Insurance myth 2: Insurance is too expensive

People often think they can’t afford insurance without actually checking if they can. An American study showed that people (especially young people) overestimated the cost of some insurance by as much as six times. That might not be the case in Australia, but we’d say it’s better not to assume insurance is out of reach. Do your research and find out for sure. 

And there are new insurance companies and products are popping up that are specifically addressing insurance affordability. Flip makes accidental injury insurance more affordable with single-day cover for $7, single-week cover for $25 or a monthly subscription for $40. As Jake says, ‘Other insurance is more expensive and it’s pretty daunting when it comes to bills. Flip on the other hand, I don’t even notice the payments. It’s not an issue.’

Insurance myth 3: Insurance companies never pay

This one’s definitely a furphy. If we look at life insurance as an example, over 90% of all claims submitted are paid out. In 2019, more than $12 billion was paid out in over 100,000 claims in Australia.

When insurance companies don’t pay, it’s usually because the insurer decides the claim doesn’t meet the terms and conditions of the insurance policy. This can happen because sometimes people think they’re covered for things they’re not. That’s why it’s important to read the policy documents carefully and get more advice if you’re not sure whether a cover is the right fit for you. 

At Flip our accidental injury insurance is designed to be different. Our sign-up process is lightning fast. We have a simple (and colourful!) Product Disclosure Statement You can submit a claim in minutes through your online dashboard and we pay approved claims fast. Don’t believe us? Read Jake’s story.

Insurance myth 4: Insurance is only for old people

Many people wonder what age to get insurance, and some think if they’re young and healthy, they don’t need it. When it comes to injuries, sports injuries are almost as common as transport injuries, and according to data published by the Australian Government Institute of Health and Welfare, young people are more likely to be hospitalised from sports injury than any other group. 

Injury insurance can cover people who like to take risks or try new things, which is when lots of injuries happen.

Insurance myth 5: If I have health insurance, I won’t have to pay anything else

Nope, not true. Private health insurance is designed to cover some areas that Medicare doesn’t and gives you more choice with your treatment options. 

With the bike crash/busted tooth example above, if you had private health cover with major dental extras, your insurance might cover some of the cost, but you’d most likely have to chip in. 

Same goes if you needed physio when recovering after surgery to repair a torn ACL. Some physio might be covered by Medicare and if you had extras cover, part of the cost of your physio appointment might be covered but you’d likely have to pay part of the cost too. 

In both examples, you might also be out of pocket for pain killers, taxis because you can’t drive to appointments and lost income from missing work. The hidden costs of recovery don’t take long to add up.

That’s why it might be worth considering something like Flip’s accidental injury insurance because it pays out set amounts into your bank account for specific injuries to help cover costs. You can use the cash payout however you like, whether you’re paying the dentist for new teeth or the Uber driver for soup deliveries.

Insurance myth 6: I can get Flip’s accidental injury insurance after I’ve injured myself

In short, no you can’t. The gist of Flip’s insurance is that you have to first turn it on, and then you’re covered for future accidents. You can’t have an accident, get injured and then decide to switch your cover on. 

It’s a bit like car insurance. You can’t have a car accident and then buy insurance to cover the damage. Same with Flip. You can’t dislocate your shoulder in the gym one morning and then turn your cover on later that day and make a claim. Your cover needs to be on before you hurt yourself. 

Some people have found this confusing because private health cover and life insurance have different rules. Let’s say you strained your back rock climbing and needed physio. Here’s a summary of how each insurance might work:

• Some life insurance: Some kinds of life insurance covers injuries in certain circumstances. If you hurt your back before you had life insurance, you can’t claim for it on your life insurance policy. And if you got the insurance and hurt your back straight away, it might have a waiting period from the time you get your cover until the time you can claim for it, and if you hurt your back during the waiting period, you can’t ever claim for that injury. After the waiting period is up, you can claim for new and different injuries if they’re covered by your policy.
• Private health insurance: If you hurt your back before you had private health insurance, you could get insured and start claiming for physio treatment (if it’s covered by your policy) after any waiting period is served, even though the injury happened before you had cover. 
• Flip’s accidental injury insurance: If you hurt your back before you had cover, after your cover expires or while your cover is turned off, you can’t make a claim. With Flip’s on-demand injury insurance you get instant cover for future accidents (if they’re covered by your policy) that happen from the minute you flip your insurance on. It’s lightning-fast and 100% digital.

Hope that’s cleared a few things up

There are lots of things to know about insurance and this article has just scratched the surface of insurance facts. Did we miss something? If you’ve got more questions about insurance myths and facts, check out our blog, FAQs, or ask our expert team a question via the chat button. We’d be happy to help.