Credit Card Insurance, a Wise Choice for Travel Insurance?
We explore the complimentary credit card travel insurance and what you need to be aware of.
Travellers who are wanting to save money on their holiday often take advantage of the complimentary credit card travel insurance offered by many Australian credit cards. However, one-size-fits-all insurance policies that credit card companies have bought in bulk from insurers to cover basic needs may not meet the specific needs of all travellers.
Therefore it’s important to be aware of the possible pitfalls of credit card travel insurance as there is often a list of exclusions that come with these policies. Some of these exclusions can include:
- Only the cardholder who books and pays for the travel is covered,
- Pre-existing medical conditions aren’t covered and/or there are limited medical conditions covered,
- Adventure activities may be excluded,
- The insurance may not be activated. You may need to activate it before departure or spend a certain amount of your trip on the credit card, such as your flights and hotels, for it to activate
- Higher excesses and age limits may apply.
For these reasons it is vital to read the Product Disclosure Statement (PDS) carefully. The last thing you want is to be inadequately covered while travelling, as this can have tragic consequences.
A separate travel insurance policy is more likely to give you a more extensive cover that will meet your needs, as it can usually be personalised. However if all your personal needs are met with the complimentary credit card cover, it can still be a good option for you.
Here are some other questions to consider when deciding on whether or not to utilise the credit card insurance, which go beyond reading of Product Disclosure Statement (PDS):
- What are the contact details for emergency assistance in case something does go wrong?
- How can you obtain a copy of the policy wording and Certificate of Insurance including your policy number?
- Who is the underwriter of the policy?
- What excess applies to claims and does it vary depending on the type of claim?
- Does it cover domestic trips?
- Is there coverage if a partner or travelling companion has an existing medical condition that results in a claim?
- Is there coverage if a relative in Australia falls seriously ill or dies (and does an age limit apply to the relative)?
- Does the coverage for cancellation only include what has been paid for on the credit card?
Regardless of whether you choose to use the free Credit Card Insurance or purchase a Travel Insurance policy, make sure you get the information that is relevant to you and always read the Product Disclosure Statement (PDS) to understand what is covered as well as the terms and conditions that may apply.
To make your insurance decision a bit easier we have created a Travel Insurance Checklist form to assist you.
To learn more and get a quote on COTA Travel insurance please click here.
The Herald Sun, The Dangers of Credit Card Travel Insurance. https://www.heraldsun.com.au/moneysaverhq/the-dangers-of-credit-card-travel-insurance/news-story/58bda0f47380b23de5cda3646faa2285
The Australian Frequent Flyer, Does Credit Card Insurance Provide Adequate Cover? https://www.australianfrequentflyer.com.au/credit-card-insurance-cover/
Insurance and Membership Services Limited ABN 59 057 159 743, AR No 246235 trading as COTA Insurance, is an authorised representative of nib Travel Services Pty Limited ABN 81 115 932 173, AFS Licence No. 308461 and only provides general advice which means you should consider if it is suitable for your needs. Before deciding to purchase the product, please read the Product Disclosure Statement available at https://cota.we.com.au/. This insurance is underwritten by certain underwriters at Lloyd’s.