Everyone loves free stuff, which is why it seems like a great perk when financial institutions offer their customers travel insurance as a complimentary extra with their credit card.
There’s an old saying though: there ain’t no such thing as a free lunch, and while you may get some rudimentary cover from these products, you need to double-check that it suits your needs.
Credit card travel insurance will usually include:
As the primary cardholder, your credit card’s policy will always cover you. Some credit card providers also offer to extend travel insurance coverage to spouses or dependent children who are travelling with you. However, there will usually be terms and conditions to this (e.g. they must be accompanying you for the entire trip), although this is standard for non-credit card policies as well.
In some instances, additional cardholders will also be covered, so if your spouse is such a person and travels without you, they could still be eligible for travel insurance.
Make sure you read your Policy Disclosure Statement (PDS) to understand what you’re covered for.
Not all credit cards will offer complimentary travel insurance. In any case, the insurance isn’t technically ‘complimentary’, since it’s generally paid for by the fees and interest charges that come with the card.
You’ll typically have to activate your credit card travel insurance before you can use it. The terms and conditions required to activate credit card travel insurance will differ across providers, and some may require you to pay for a portion of your trip with your card.
Like most types of insurance, there are a few things that credit card travel insurance doesn’t cover. Specific exclusions may vary from provider to provider, but you can generally expect the following to be excluded from cover:
Your PDS will outline the inclusions and exclusions of your policy, so ensure you’ve read this thoroughly before embarking on your trip.
To help you weigh up whether credit card travel insurance might be the right product for you, we’ve outlined some of the pros and cons below.
Because your travel insurance is generally underwritten by an insurance company and not actually by your credit card provider, you’ll need to claim directly with the insurer. However, 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.
To make your claim, make sure you 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 in which 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.
The more important question you need to ask is, “How exhaustive is my travel cover?”
Credit card and insurance providers have gotten into trouble in the past because they failed to adequately disclose the extent of their cover, including things like who was covered by the policy (i.e. dependents, partners, or just you).1
Another issue commonly encountered with this product is exclusions and restrictions to your travel policy. As we’ve already looked at above, credit cards with travel insurance can exclude people above a certain age, trips longer than a specified duration and, perhaps most importantly, pre-existing medical conditions from cover. It’s also likely the credit card provider will only cover you for the trip you paid for on the card,2 so be mindful of this if you require insurance for multiple legs.
All this aside, you may only be interested in basic cover, and your credit card provider may offer you everything you believe is necessary for your trip. If this is the case, just be sure to read the PDS for that policy to check if it offers enough coverage.
If, however, it isn’t enough for your needs, why not consider comparing standalone travel insurance options? There are basic policies that cost relatively little that may offer broader cover to credit card policies.
We highly recommend you follow the below steps to ensure you’re protected on your trip.
1 ASIC – 15-136MR ASIC welcomes improved credit card travel insurance disclosure. Press release. Published June 2015. Accessed August 2020.
2 Moneysmart – Travel insurance. Accessed August 2020.