Benefits and oddities in credit card cover
From kidnapping to unfortunate legshortening, you’d be surprised at what your credit card travel insurance covers.
Afew months ago I submitted a travel insurance claim for $23,000. So let’s be honest here. While trying to maintain some semblance of being a grown-up financial professional, I was shaking in my pants. It’s a heck of a lot of money.
The itinerary was Asia, an atoll then touchdown in London, but weeks before leaving I became ill. Hotels, wildlife parks and even the floatplane were all non-refundable, when cancelled. Delaying flights caused a large price hike, as the same class of early-bird fare wasn’t available when the departure date was altered.
My policy was taken out online with Southern Cross. Being the nerd who actually reads a policy document means I know a bit about insurance. But nothing prepared me for the fear of making a claim. As they trawl your medical records and receipts, your heart judders.
The claim was paid in full, with a big sigh of relief.
I’m often tempted to rely on the travel insurance that comes with my ANZ credit card, but never put the time into reading the 52-page policy. You assume it will be awash with fish-hooks.
Quite the contrary, though. Having had a chance to look more carefully at what the credit card offers, I’ve been pleasantly surprised.
The biggest risk is simply relying on the policy as it stands and flying off into the sunset. In my case the cover would have tripped me up in a number of areas:
Value of the trip: The limit for loss of deposits of $10,000 per person wasn’t enough. The total cost of the trip was more. Length of the trip: ANZ platinum cards get 90 days’ cover and gold cards 40 days’ cover. My trip was longer and that invalidates the whole policy. Preexisting medical conditions: None are covered and I have enough of a chequered history to worry about that. Value of personal items: There’s a $2000 limit on any single item and a $5000 limit on a laptop. If you have a more expensive watch, piece of jewellery or tech-item then you’re putting it at risk. Half the value of the trip must be paid on the credit card: I didn’t, because the travel agency wanted to charge an additional $500 to use this payment method. Adventurous activities: Mount Etna in Sicily, we walked
from the cable car to the crater rim. Loads of people were doing it. While ANZ’s policy document doesn’t mention heights, their website makes it clear that trekking over 3000 metres can be hazardous and I’d need to notify them. Here’s what I didn’t know about my credit card travel cover:
1. You can ask for up to six months’ cover if you pay an additional premium.
2. If you phone, you can list out all your pre-existing conditions. They will charge $100 to cover these or decline you.
3. You can add on valuable items up to $10,000. An additional premium will be charged.
4. You don’t actually have to put half the value of the trip on a credit card. In the case of ANZ, you are also eligible if you hold a credit card and half your costs are paid from an ANZ bank account.
5. The insurance activates when you pay for the holiday. You don’t need to notify anyone. Your policy number is the first six digits of the credit card (in the case of ANZ).
6. You must hold a return ticket and be a NZ resident.
7. Your immediate family departing and returning with you (spouse and children) are covered.
8. There is rental car excess cover – this is a big bonus. Car companies are nothing short of shysters in charging additional daily costs to get rid of the $3000 excess.
9. Not all cards have insurance benefits. If you’d like the reassurance of a printed confirmation saying you are covered, you can enter your details online and they will confirm you are eligible.
10. Overseas medical expenses have no upper limit. There’s unlimited cover for any part of the world.
11. If you’re 90 years old they won’t cover you. If you’re 75 to 89, there are numerous areas you’re on dodgy ground. No overseas medical cover is the most alarming. All is not lost. Just complete a ‘‘mature age assessment’’ and see if they accept you. There will be a charge, of course.
12. Ever been kidnapped? They’ll pay a ransom of $250,000.
13. Transport accident payout of $1 million if you die on a plane, bus, ferry or train, or within one year of resulting injuries. It only applies to platinum cardholders and you must put the full cost of the flight or bus on your card. To cover their financial bottoms, if more than ten ANZ customers are on the same crashing flight, you get a pro-rata share of $10 million.
14. There are payouts for accidents. It takes a fair old catastrophe to get the full $100,000 (death and full paralysis). Coming home with one leg 5cm shorter than the other is $7000. Who dreams up these possibilities?
15. Deprivation of luggage kicks in after eight hours.
My ANZ platinum card costs $150 a year plus $10 for a spouse card. If only they’d raise the pre-trip cancellation limit, I could use it. The $10,000 per person feels dated given the number of Kiwis on cruises and more exotic locations, but for many it will be perfectly adequate.
Whichever bank you are with, it’s worth checking out what they’re offering.
Janine Starks is a financial commentator with expertise in banking, personal finance and funds management. Opinions in this column represent her personal views. They are general in nature and are not a recommendation, opinion or guidance to any individuals in relation to acquiring or disposing of a financial product. Readers should not rely on these opinions and should always seek specific independent financial advice appropriate to their own individual circumstances.
There are payouts for accidents. Coming home with one leg 5cm shorter than the other is $7000. Who dreams up these possibilities?