Credit card insurance for travel stacks up

USING free travel insurance provided by credit card providers can seem scary.

There’s no confirmation, policy number or policy documents, and you must rely on their word that you will be covered if things go wrong.

However, this complimentary travel insurance is a money-saving opportunity for Australians with rewards credit cards, and can stack up nicely against traditional travel insurance.

Critics say it’s not free because cardholders pay hundreds of dollars a year in annual fees plus higher interest rates, but for those who already collect card benefits such as frequent flyer points or travel credits, it costs nothing extra.

A recent report by consumer group Choice, which reviewed 59 travel insurance policies that come with credit cards, says the cover looks as good or even better than stand-alone policies, but is generally not as straightforward or flexible.

“Just having the credit card isn’t enough – usually insurance only applies when you buy your tickets with it,” Choice says.

“Some banks also require you to notify them to get full coverage for each trip. While base coverage will still give you emergency medical treatment, you might not get coverage for property damage or luggage delays. Check if you need to do anything to activate any extra features.” Excesses are also often higher – perhaps $250 instead of $100 – and preexisting medical conditions are generally not covered. Sometimes domestic travel isn’t covered, Choice says.

Phil Hoffmann Travel managing director Phil Hoffmann said travellers should check what complimentary insurance covered.

“Check what they cover and check what they don’t and get it in writing,” he said.

Underwriters for the credit card insurance are often the same as traditional travel insurance products, so claiming’s the same.

An American Express spokesman said the credit card terms and conditions document “acts as the policy document for the insurance”.