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Is credit card travel insurance all it is piped up to be?

Published on November 27th, 2020
  Written by 
Bill Tsouvalas
Bill Tsouvalas is the managing director and a key company spokesperson at Savvy. As a personal finance expert, he often shares his insights on a range of topics, being featured on leading news outlets including News Corp publications such as the Daily Telegraph and Herald Sun, Fairfax Media publications such as the Australian Financial Review, the Seven Network and more. Bill has over 15 years of experience working in the finance industry and founded Savvy in 2010 with a vision to provide affordable and accessible finance options to all Australians. He has built Savvy from a small asset finance brokerage into a financial comparison website which now attracts close to 2 million Aussies per year and was included in the BRW’s Fast 100 in 2015 as one of the fastest-growing companies in the country. He’s passionate about helping Australians make financially savvy decisions and reviews content across the brand to ensure its accuracy. You can follow Bill on LinkedIn.
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Credit cards come with a variety of features to make your life a bit easier. However, if you are a travel enthusiast or someone who has recently stumbled upon the travel insurance feature you might be wondering if it is worth it. Can you possibly rely on a credit card to take care of your travel insurance needs?

What is travel insurance?

According to ASIC, 30% of Australians rely on their credit cards for complimentary travel insurance while 31% get it directly from an insurer. Travel insurance is there to help take care of you when things go wrong on a trip. This feature is usually available with gold, platinum or diamond credit cards with no additional cost. It doesn’t only cover the cardholder but your spouse and two children under the age of 22. It can come in handy in those moments where you have lost luggage, cancelled flights, and medical cover that covers you for accidents and injuries while you are overseas.

What will make my travel insurance void?

Checking the details of your travel insurance can help you know off the bat what you are and are not covered for. Unfortunately, 58% of Australians failed to look at the exclusions of their travel insurance policy which can leave you feeling frustrated when you need it the most. There are travel insurance policies that do not cover pre-existing medical conditions and injuries along with; adventure sports activities, loss or injury due to natural disasters or war, and pregnancies that related problems for women who are 22 weeks into gestation.

How can I activate insurance feature?

Accessing the complimentary travel insurance on your card is not an automatic process. To activate this feature requires that you read the terms and conditions of your complimentary travel insurance on the card which differ from card to card. However, the most common way to access this is if you pay your airline tickets with the card along with other travelling expenses such as accommodation and car rentals you can unlock this feature. Some cards require that you spend a certain amount in order to unlock this feature.

If I must pay to unlock features is it really free?

Although complimentary travel insurance has amazing features that are similar to what is provided by an insurer, it does come with a payment fee which you pay through your annual fee. It is important that you compare the excess cost that comes with owning a high-end credit card that unlocks such benefits to see if it is worth the cost. The difference in costs can surprise you once you start comparing cards.

Will I be covered if I travel for an extended period?

The period in which you are covered for depends on what type of credit card you have in your wallet and its terms that come with the travel insurance. Some cards can cover a trip for 12 months while others do not cover trips that go beyond the 3-month period mark.

The additional perk that makes travel insurance on your credit card worthwhile is that it has extra’s that give you discounts on hotels that are associated with the card. You can also get flight discounts through the credit cards frequent flyer programs, free complimentary wines at associated restaurants, and a concierge service. Just always keep in mind to read the fine print before signing up for one.

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This guide provides general information and does not consider your individual needs, finances or objectives. We do not make any recommendation or suggestion about which product is best for you based on your specific situation and we do not compare all companies in the market, or all products offered by all companies. It’s always important to consider whether professional financial, legal or taxation advice is appropriate for you before choosing or purchasing a financial product.

The content on our website is produced by experts in the field of finance and reviewed as part of our editorial guidelines. We endeavour to keep all information across our site updated with accurate information.

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