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Credit Card Travel Insurance | The Truth

21 January, 2020 By Eugene Wylde

When planning a holiday, oddly, travel insurance is often the first expense to bite the dust; or occassionally it gets forgotten.  Did you know that you might be eligible for free, ready-to-go travel insurance if you pay for some or all of your trip on your credit card?  Utilising complimentary travel insurance offered by your credit card could be the answer, but you’ll need to know the ins and outs. You’ve already paid the credit card annual fee – so why not use the free travel insurance?!

It's important to note that not all credit cards come with travel insurance and some conditions apply. We've done some digging to provide you with the highlights and lowlights to help you work out which option best suits your needs.

Cost aside, the most important thing to consider when taking out any travel insurance policy is that you understand what you are covered for and any restrictions that apply. The same applies for ‘free’ credit card travel insurance.

Like most insurances, the true value of the policy only becomes apparent when it is time to make a claim, and then…it could be too late.  If you fall outside the fine print of a travel insurance policy and the insurer refuses to pay up, what seemed like a bargain at the time, could end up being a daft deal.

Not all credit cards offer travel insurance

Usually, ‘free’ travel insurance is only offered with high-end credit cards like gold or platinum credit cards and some rewards cards. Given most of these cards have hefty annual fees, some would argue that the word 'free' is used a little too loosely as a lure by the credit card companies. Often with credit card benefits, the higher the annual fee, the more inclusions or rewards you get.

Consumer confusion and complaints about card-based travel cover prompted an investigation by the Australian Securities Investment Commission (ASIC) in June 2015.  The two most common problems reported by cardholders were:
  • Firstly, uncertainty around what customers need to do to kickstart their travel cover; and
  • Secondly, who is covered under the policy.

Activate your travel cover

Nearly all credit card travel insurance requires you to have paid a large portion of your travel expenses using your credit card in order to be covered. The percentage and activation process varies between card providers, so make sure you know the terms.

In many cases you need to pay for all or part of your airfare using the credit card, which can be easily overlooked if you hand cash to a travel agent or if you pay for tickets using Poli or BPAY to avoid credit card surcharges.
  • Auto-Activation on Purchase:  In most cases, your travel insurance is automatically activated when making any travel-related purchases on the card, such as flights and accommodation.
  • Notify Your Card Provider: On other cards, you may need to notify your card provider when you wish to activate your travel insurance.​
We've rounded up the activation process for the most popular credit card providers below, so that you can ensure your policy is activated before you jet off. If in doubt, make sure you read the PDS to understand the requirements or contact your card provider.

Know who is covered

You will need to consider who requires cover, and importantly, who is actually covered.  Some credit card travel insurance policies will only cover the cardholder, with a few card issuers extending cover to family members when travelling with the cardholder and having their travel expenses paid on the card.

‘Complimentary’ card cover often has age restrictions so a senior traveller is likely to have to purchase a standalone travel insurance policy.

Consider your trip length

The third consideration is your trip length. Credit card travel insurance will often only provide cover for a trip length up to 3 months. A select few may provide cover up to 12 months, so be sure to check the limits. Unlike standalone policies, you will not have the option to extend your trip beyond the limits specified. So, if you’re planning on a longer trip and want the flexibility to extend while overseas, it would pay to look into stand-alone travel insurance options.
Most independent insurance providers will allow you to extend your holiday, however, credit card companies generally will not allow this. If you extend your trip beyond the pre-confirmed travel time, your cover may cease.

Other traps to look out for

You may be able to save a few dollars by taking advantage of free credit card travel insurance, but there are a number of other catches that consumers need to be aware of before deciding on whether this cover is enough.

Pre-existing Medical Conditions
All credit card travel insurance covers medical costs for overseas travel, however, some have lesser limits than a standalone policy. There are also strict exclusions in relation to pre-existing medical conditions.

When purchasing standalone travel insurance, there is a list of conditions automatically covered and you often have the option to cover additional medical conditions by paying an additional premium. Whereas credit card travel insurance generally excludes cover for any pre-existing medical condition.

Activities Covered
If you're heading to Bali or South-East Asia, it's common practice to just jump on a scooter. Whether you're the driver or a pillion passenger propped on the back, it's important to ensure you're covered as motorbike accidents happen all too often overseas.  As an example, the complementary card insurance with CommBank doesn't cover eligible cardholders on a bike with an engine capacity over 50cc (unless you purchase their Motorcycle/Motorscooter/Quadbike Plus upgrade). Find out who covers riding a motorbike overseas.

If you’re heading to the slopes for some ski action or planning on jumping out of a plane, you might want to also check what activities are covered. You may require a specialist standalone policy for your planned activities.

It’s no fun if your stuff gets nicked or if you end up in a pickle during your travels, but you'll be even more upset when you find out that the excess attached to your credit card insurance makes claiming worthless.
Credit card travel insurance often has a much higher excess in comparison to stand-alone insurance providers. Standalone travel insurance policies have variable excesses (generally $100 - $250), however, the excess for credit card travel insurance can be as much as $500.

High-Value Items
If you’re travelling with high-value items, you should check the per-item limits that apply. For example even though luggage cover may stipulate $10,000 if your high-end DSLR camera is worth $2,000 and the per-item limit is $750 you’ll probably want additional cover. Credit card travel insurance doesn’t allow you to add high-value items whereas standalone travel insurance does.

There may also be some exclusion of coverage for valuables put into checked luggage. For example, breakable items like cameras and laptops are often not covered if they are damaged during travel.
A large proportion of ‘complimentary’ credit card travel insurance excludes coverage for lost items. You need to read the terms and conditions carefully.

in Summary

The term 'free' does not necessarily mean 'free'. Credit cards that provide ‘complimentary’ travel insurance typically have annual fees ranging from $87 to over $500.

If you're a healthy, savvy traveller who takes more than two standard short trips a year, credit card travel insurance could be the winning ticket. When you compare the card annual fee cost to the cost of standalone travel insurance, it may save you some cash. It’s good to weigh up the options but make sure you read the terms of cover paying particular attention to exclusions.

Be it business or leisure, there are many affordable options out there for covering your travels. Your focus should be ensuring you have enough cover for your planned trip.  Use our comparison to instantly compare travel insurance quotes and levels of cover from 25+ reputable travel insurance companies.

Activate your 'free' travel insurance

The table below is a snapshot of some of Australia's leading premium credit cards that offer complimentary travel insurance.
We hope this guide has helped answer some of the common questions posed by many credit card holders in terms of whether complimentary travel insurance is enough and how to activate the insurance cover.  The information provided is factual at the time of writing and general in nature.  We have not considered your personal circumstances.  Eligibility requirements and terms and conditions on cover are subject to change from time to time.  Please refer to your credit card provider and the latest policy wording prior to your travels.



We get a lot of questions on credit card travel insurance. Here's some answers to our most common ones.

Which Australian credit cards come with travel insurance?

Not every credit card comes with travel insurance. Complimentary travel insurance is typically offered on premium credit or rewards cards that have higher annual fees. Our table lists Australia's premium cards with travel insurance

What is the best credit card for travel insurance?

The benefits you get with credit cards varies based on the type of card you have, the policy provider and your individual circumstances, so there isn’t actually a “best” credit card for travel insurance. Our table lists Australia's premium cards that provide travel insurance and outlines any activation criteria.

Can I cover my medical conditions with my credit card cover?

In most cases, pre-existing medical conditions will not be covered by travel insurance that comes with your credit card, but you may be able to get cover for this by contacting the insurer and paying an additional premium. You will need to check the Product Disclosure Statement (PDS), also known as policy wording to find out whether pre-existing medical conditions are covered. The alternative is a standalone travel insurance, learn more about covering your medical conditions.

Am I covered if I go skiing?

Like all insurances, some limitations apply to the travel insurance that comes with your credit card or rewards card and skiing is often one of them. Winter sports activities such as skiing and snowboarding are often excluded from credit card travel insurance, so if you're planning on hitting the slopes you should contact your provider to ensure that you have adequate cover for your planned activities. If not, opt for a standalone ski insurance policy.

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