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It’s important to have travel insurance before your overseas adventure, but before you go ahead and take out a new policy, check your credit card to see if you already have access to it.
Planning for a holiday can be a hectic time, and there’s often a lot to do before you head off, like making sure your flights are booked and your accommodation is sorted, getting your bags packed, finding someone to look after the dog, dealing with your feelings of guilt for not taking said dog with you … the list goes on.
Amidst the rush, it can be easy to forget travel insurance, but if you happen to have an accident or get sick overseas, then your trip could turn into a very expensive one. If you’re looking at booking travel insurance before your next trip, check to see if you already have access to it via your credit card.
Wait, credit cards come with travel insurance?
While it’s not a standard feature of all credit cards, some premium credit cards do indeed come with complimentary travel insurance if you book your travel with the card, which can help give you peace of mind on your next trip – at the time of writing, there are more than 70 of these cards on Canstar’s database. While this travel insurance may not necessarily be ‘free’, given that cards tend to charge an annual fee, it can be a convenient and cost-effective alternative to taking out a stand-alone insurance policy for your next trip.
If you are considering taking out a new credit card and are a keen international traveller, then you may consider taking out a card that offers complimentary insurance – on the other hand, if you already have a credit card and travel insurance is a priority for you, it may be worth your while to check with your provider and find out what you could already be covered for. Either way, here are some important things to know about credit cards and travel insurance.
How does credit card travel insurance work?
Even if your credit card comes with complimentary travel insurance, it’s likely you’ll need to activate it before your next trip in order for you to be covered. Depending on your provider, this may involve making a selection in your provider’s app or online portal or calling them. Typically, you will then be provided with a policy number and certificate of insurance to reference should you need to make a claim.
The type of cover you have will vary depending on your card, but travel insurance could potentially cover:
- Overseas medical expenses
- Lost, damaged or stolen property
- Cancelled or delayed flights
- Legal liability (for example – if you cause an accident during your trip and are required to pay compensation to other people).
If you do have travel insurance with your credit card, then before you set out on your trip, it is important to consider such things as:
- Who is covered by the policy?
- What are the limits on the cover?
- Is there an excess to pay?
- Does the policy have any exclusions?
- Are you covered for pre-existing medical conditions?
What are some things to be wary of?
It is worth keeping in mind that rewards credit cards and ones that offer perks tend to be more expensive than others, and this is the case with cards that offer complimentary travel insurance. These can be more expensive than other kinds of credit cards, and can come with higher interest rates as well as potentially higher annual fees than other kinds of cards.
Of the credit cards on Canstar’s database that have complimentary travel insurance, the highest annual fee is $1,750, while the lowest is $0. Within this range, though, many of the cards have annual fees of between $150 and $450. It is therefore worth asking whether the fee you pay for the card itself will outweigh the perks that come with the card, which can include such things as rewards points, airport lounge access, or cashback offers as well as travel insurance. If the value of the rewards counterbalances the fees you’ll pay in a year, then a card with complimentary insurance may represent good value.
It’s also important to know what you’re actually covered for before setting out. Depending on the card you have, you might have more basic or more comprehensive travel insurance, and if there are any specific things you need to be covered for (for example, if you are going on a skiing holiday and need cover related to that) you may need to pay an additional charge. You could be in for an unwelcome surprise if you find out that your travel insurance cover is less comprehensive than you think.
If you’re considering taking out any sort of credit card, especially a premium card, it’s also important to be confident that you can manage your finances. If you are able to pay off the balance owing on your card each statement period, then a card with complimentary travel insurance could be a cost-effective way for you to be covered, but if you are the type to carry a balance on your credit card, you could find that the interest you’re charged ultimately outweighs the benefit you’d get from complimentary insurance.
Cover image source: adriaticfoto/Shutterstock.com
