Is credit card travel insurance worth it?

Maybe; not all credit cards will have travel insurance included. If you’d like travel insurance as a feature, check whether a credit card has travel insurance before you choose one.

If you’re unsure whether your existing credit card includes travel insurance, you can contact your provider and ask if you’re eligible.

Credit card travel insurance usually covers overseas medical expenses, cancellation fees and additional expenses, lost or stolen luggage and personal liability.

Some credit card travel insurance may provide additional cover for incidents such as accidental death, loss of income and rental vehicle excess. Emergency assistance will also usually be included.

It’s important to note that different credit cards will have different limits and sub-limits for each inclusion, so make sure to read the policy’s Product Disclosure Statement (PDS) to understand if it’s right for you.

Your credit card’s policy will cover the primary cardholder but some credit card providers also offer to extend travel insurance coverage to spouses or dependent children travelling with you. There will usually be terms and conditions associated with this, which is standard for non-credit card travel insurance policies as well.

One instance is that dependent children typically must be accompanying you for the entire trip, although there are instances where additional cardholders can be covered even if they travel without you.

We recommend that you read the PDS to understand what you’re covered for. You can also read the Target Market Determination (TMD) document to check your eligibility for cover.

Typical exclusions/conditions with credit card travel insurance relate to pre-existing medical conditions, add-ons (such as adventure sports or cruise cover), age limits and trip duration.

Specific exclusions vary from provider to provider, but you can generally expect the following to be excluded from cover:

• Pre-existing medical conditions. While most standalone travel policies can cover certain medical conditions, it’s usually an outright exclusion on credit card travel insurance. This means if you have a medical emergency due to your condition, you may not be covered.
• Adventure sports and activities. If you plan on hitting the slopes or scuba diving during your trip, you’ll find that most travel insurance policies (both standalone and credit card) will usually exclude adventure activities and snow sports from standard coverage. However, where credit card travel insurance will exclude these completely, many standalone policies offer cover for these activities as an optional extra.
• Age limits. Credit card travel insurance usually has an age limit on coverage (e.g. 74 years of age). If you’re past the age limit but still want travel insurance, you can find out more about travel insurance for seniors.
• Trip duration. Your coverage through a credit card travel policy is usually limited to trips between one and six months in length. In contrast, standalone policies can cover trips up to 12 months in duration, subject to day limits.

Your PDS will outline the inclusions and exclusions of your policy, so ensure you’ve read this thoroughly before embarking on your trip.

If you are unsure which type of travel insurance is right for you, we’ve compared some differences between credit card travel insurance and comprehensive travel insurance.

To activate your credit card travel insurance policy, you’ll likely have to inform your provider of your travel plans and spend the minimum amount of your travel cost with your credit card.

Typically, you’ll have to activate your credit card travel insurance before you can use it. The eligibility criteria required to activate your credit card travel insurance will differ across providers but will be listed in your policy documents.

When letting your credit card provider know of your travel plans (usually through an app or website), you may be required to disclose your travel dates, destinations and have a return ticket home. You may also need to spend a minimum amount of your travel costs for your trip with your credit card to be eligible for the complimentary credit card travel insurance policy. Once you’ve activated your card, there may also be a waiting period (e.g. three days) until you can make claims.

Once your international travel insurance policy is activated, you can claim for losses related to your trip. The specifics of your policy and further details on claiming can be found in your PDS and information booklet from your credit card insurer.

To claim on travel insurance through a credit card, you’ll need to make the claim directly with the insurer. This is because your policy is generally underwritten by an insurance company rather than your credit card insurer.

Your credit card provider should have a help centre that can direct you to where you need to make your claim.

When an incident occurs overseas, you need to first report it to the relevant authorities (e.g. police in the case of theft or violence) or go directly to a hospital or other medical facility in the event of illness or injury.

Then, to make your claim, get a copy of the police report, incident report (e.g. theft report from your transport provider) or medical notes and certificates. You’ll need to submit these to your insurance provider, along with any other supporting documentation, for your claim to be processed.

Many insurance providers will stipulate the time frame you can claim; within 30 days of your return to Australia is a common requirement. However, it’s always best that you claim as soon as possible.

Before taking out credit card travel insurance, you should read through the policy’s PDS and make sure to compare the options available. We highly recommend you follow the below steps to ensure you’re protected on your trip.

• Read through your PDS. Make sure you’re happy with the extent of your coverage. Theft, medical treatment, travel delays and cancelled flights may be covered under a regular travel policy but not in your credit card’s one.
• Check how your card’s insurance is activated. Do you have to spend a minimum amount or a percentage of the costs to be eligible, or can you simply contact your credit card provider to get coverage?
• Consider whether the fees and interest rates outweigh the coverage. Will the annual fees and interest rates be worth more than the coverage and benefits you’ll be entitled to, or what you’d pay for a standalone policy? Credit cards with low fees may not offer much coverage at all.
• Compare your options. If your credit card travel insurance isn’t quite up to scratch, there are many affordable standalone options; take a look at some of them with our comparison service.