You can see country-by-country what is covered by World Nomads at this link:
World Nomads - Travel Insurance and your adventures
It varies by each country. Unfortunately Australia and New Zealand are some of the more restrictive countries based on what is excluded. I would guess the list has something to do with local regulations since it is wide open in most countries.
Anyway, for example...in Australia & New Zealand you're covered for Bungee but not Skydiving. In fact a lot of common adventure activities in those two countries are excluded.
Will you be covered by normal insurance? Travel insurance is emergency care only, and most normal policies will have some provision for emergency care while traveling internationally. If you have insurance you should call and find out what the deal is when you're out of the country and potentially using non-network hospitals for emergency care.