In Australia there seems to be a lot of confusion around travel insurance and in particular, the free travel insurance you get as the holder of a premium credit card. When we looked into it, our research left us more confused than ever!
Luckily, Australia’s most trusted consumer advocacy group, CHOICE, recently took up the challenge of cutting through all the terms and conditions imposed by the banks, to come up with an easy to understand guide to credit card travel insurance.
The first thing you need to know is that just being the holder of a premium credit card which offers credit card travel insurance isn’t enough to provide you with coverage. You’ll probably have to use that specific credit card to purchase your tickets for an overseas trip and some banks also require that you notify them about your travel plans to activate the credit card travel insurance policy.
Secondly, free credit card travel insurance isn’t really ‘free’ because you’re already paying for it with the annual fee you pay to your credit card issuer – so if you have it, you may as well use it.
The good news is that in some cases, credit card travel insurance is cheaper than purchasing stand alone travel insurance. The bad news is that if you need to make a claim, you’ll pay a higher excess. Of course, like all insurance policies, terms and conditions do apply and some credit cards offer more benefits than others.
According to CHOICE’s Annual multi-trip and credit card travel insurance reviews NAB credit cards are the best, offering unlimited medical expenses, unlimited cancellation expenses and generous baggage expenses. NAB’s annual fee isn’t too bad either when you compare it with other premium credit cards on offer. Click Here to see how your current credit card measures up.
According to CHOICE some credit card travel insurance doesn’t cover pre-existing medical conditions and the credit card issuer won’t allow you to pay an extra premium for an exception. Those who do cover pre-existing medical conditions, usually won’t cover mental health conditions. However, most travel insurance policies don’t cover mental health so you’re really no worse off than if you purchased a stand alone policy.
Some the Perks of Credit Card Travel Insurance
To remain competitive, the banks offer many different benefits, rewards and bonuses to their credit card holders which make credit card travel insurance more a better deal than stand alone travel insurance. These include:
- Unlike standalone travel insurance, credit card travel insurance is not location-specific, so you won’t need to purchase separate policies for every country you intend to visit on your overseas trip. However, exclusions do apply for travel to countries under United Nations embargo.
- Some credit cards will allow you to purchase plane tickets using your rewards points and still receive the benefits of credit card travel insurance.
- According to research conducted by CHOICE, the level of coverage provided by credit card travel insurance often exceeds that of stand alone travel insurance policies.
Which is Best?
According to CHOICE, even with an annual fee plus credit card interest fees, you still save $461 if you use the cheapest recommended credit card, instead of the cheapest recommended annual multi-trip policy.