What is credit card travel insurance?

Complimentary credit card travel insurance is a popular feature of some premium credit cards. It can provide cover for the cardholder when they are travelling domestically and/or internationally.

Complimentary travel insurance is not necessarily ‘free’. Credit card providers will usually charge an annual card fee to cover the cost. However, it could still be a cost-effective alternative to a standalone travel insurance policy.

It’s important to check what your credit card travel insurance covers and what you have to do to activate your policy before you travel. For example, you may need to pay for your flights or other travel expenses with your credit card to be eligible for cover.

What is covered by complimentary credit card travel insurance?

Coverage will depend on the credit card travel insurance policy. It could include cover for:

  • Overseas medical expenses.
  • Lost, damaged or stolen property.
  • Cancelled or delayed flights.
  • Accidental death.
  • Legal liability (e.g. if you cause an accident during your trip and are required to pay compensation to other people).

What you are covered for, who’s covered, and the limits that apply, will depend on your policy, so it’s important to read your policy documents. Exclusions can also apply and policies may only cover trips of a certain length. There may also be an excess amount payable if you need to make a claim.

Read the Product Disclosure Statement (PDS) and Target Market Determination (TMD) for the insurance policy to understand what’s included and whether it’s suitable for your situation.

Complimentary credit card travel insurance may only be available to customers who have more premium credit cards, such as rewards or frequent flyer cards. Other credit cards may still include complimentary travel insurance, but for a more basic level of cover or a lower amount.

What types of credit card travel insurance are there?

Depending on the credit card you choose, some or all of the following types of insurance may be included.

Overseas travel insurance

This may cover the policyholder for a range of risks related to travelling overseas, such as:

  • Costs incurred from cancellation or delay.
  • Medical expenses
  • Lost baggage and replacement of travel documents.
  • Funeral, cremation or body repatriation costs. 

The policyholder may also have the option of adding additional cover to their policy for specific risks (e.g. skiing or cruise cover), which could come with additional fees. 

Domestic travel insurance or interstate flight inconvenience

This may cover the policyholder for some of the risks associated with interstate travel in Australia. Depending on the policy, covered risks may include:

  • Delay or cancellation costs.
  • Loss or damage to personal belongings
  • Funeral expenses

Transit accident insurance

This kind of policy may cover accidental injury or death that occurs while the policyholder is boarding or travelling as a paying passenger on a plane, bus, train, ferry or eligible form of transport.

Car rental excess cover

Some policies may cover the policyholder for the cost of any excess they may need to pay to a rental car hire company in the event of an accident involving the rented vehicle. This cover is sometimes included as a benefit under a broader travel insurance policy or can be added separately.

 

Frequently Asked Questions about Credit Cards with Complimentary Travel Insurance

The best credit card travel insurance will vary depending on your circumstances and needs, such as spending habits and travel frequency. Other factors to consider include:

  • How you will pay off your credit card balance: the interest on rewards credit cards can be higher than more basic cards, so it’s important to consider whether and how you’ll pay off your balance each statement period to avoid interest charges piling up.
  • Spending requirements: some cards may have a minimum spend required in order to qualify for complimentary travel insurance.
  • Annual fees: credit cards with travel insurance usually come with higher annual fees.
  • Other card features: it’s important to see what other features the credit card may offer, such as complimentary airport lounge access, frequent flyer points, or rewards points. You may also want to consider the card type and network it uses.
  • What’s covered: the complimentary travel insurance may not suit your specific travel needs, so it’s important to read through what is and isn’t covered before opening a credit card account for its complimentary travel insurance.

Here are some of the potential pros and cons of complimentary credit card travel insurance:

Pros of complimentary credit card travel insurance

  • It may be cheaper than buying standalone travel insurance, particularly for frequent travellers, as you won’t need to purchase a new policy each time you travel.
  • The policy may also cover your spouse or family.
  • You can continue to receive complimentary cover as you get older (subject to the policy’s upper age limit), compared to standalone policies that tend to get more expensive as you age.

Cons of complimentary credit card travel insurance

  • The card may charge higher annual fees and interest than a card with no complimentary insurance.
  • The cover will vary depending on the card and may be lower than what you can get with a standalone policy.
  • There may be exclusions, such as trip duration and age limits.
  • You may need to activate the card by meeting certain requirements, such as spending a certain amount or paying for the trip using your credit card.

The question of whether credit card travel insurance is ‘worth it’ will depend on the level of coverage offered by the travel insurance policy and your individual circumstances. Make sure you check the list of events that are and aren’t covered and what the policy limits are.

If you don’t think you’ll have enough coverage or you won’t be covered for the events you want, you may want to consider buying a standalone travel insurance policy.

When looking at travel insurance, the Australian Government’s Smartraveller website recommends shopping around and choosing what’s right for you, while thinking about:

  • where you are travelling
  • how long you are travelling for
  • what you plan to do there
  • your age and health
  • how much your valuables are worth.

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