CHOICE travel insurance buying guide mentions alcohol-related exclusions for insurance:
Alcohol
Cover for overdoing it on vodka and Red Bull and float-tubing down a river in Laos isn't included in any policy. Insurers simply won't pay for costs arising from you being under the influence of alcohol or a drug (except where taken under the advice of a doctor).
Case study: Jenny*
Jenny was nightclubbing with friends in Bali, Indonesia, when she became ill after drinking a cocktail. Her friends recognised the symptoms of methanol poisoning and rushed her to hospital.
Fortunately, Jenny recovered after two weeks of care. But because she had been drinking alcohol at the time she was poisoned, her insurer refused to pay the claim.
Jenny's cash-strapped family had to sell their car to pay the $25,000 in medical expenses.
Alcohol and travel insurance: how does drinking impact your cover? has a look at various travel insurance policies, and lists alcohol-related exclusions for them. For what it's worth, it mentions that just because a company has an exclusion, it's not necessarily a blanket exclusion, such as Southern Cross Travel Insurance (expanded on in their blog post They say "Nothing good happens after midnight!").
I'm aware of the risks of excessive drinking, and I'm not a big drinker - I'm often the only person in a gathering that isn't drinking, but I occasionally have a foreign drink or two when travelling, such as sake or plum wine.
Is it practical to find travel insurance for Australians that has no alcohol-related exclusions at all?