What is credit card travel insurance?
Everyone loves a freebie, but is free travel insurance from a credit card company something you can really trust? If you are an Aussie getting ready to go abroad, you may be tempted to just use the free travel insurance that is offered with your credit card’s normal package. While many credit card companies have great features, it is still important to read the fine print to make sure that your credit card has the right cover for the adventure or holiday you are planning. Use the following information to make an informed decision about whether your credit card’s travel insurance policy is enough for your holiday, or if you may need to consider a standalone travel insurance company, like youGo Travel Insurance.
Types of Credit Cards offering Free Travel Insurance
At the cost of high fees and high interest rates, some credit card companies have begun offering “free” or “complimentary” travel insurance as an added feature. The first thing to realize is that not all credit cards offer travel insurance. Just because there is a card in your wallet does not mean you have an automatic travel insurance policy.
Usually complimentary travel insurance is only available for high-end cards like gold and platinum cards or with some rewards cards. The annual fees on these cards tend to be significantly higher because of all the extras you get, but if you are savvy traveller and take more than two trips a year, the annual fee could end up being a good deal for complimentary travel insurance.
Basics of Credit Card Travel Insurance: What’s Covered?
If you decide that your credit cards travel insurance is the best option for you, it’s very important to know what you are covered for and what you are not covered for. That way you won’t be stuck in a foreign country with a big problem, wishing you had read the fine print before you left.
Who’s Covered and For How Much?
The standard amount for credit card travel insurance is $20,000 for items like baggage, property and flight cancellation. Take note that usually only the cardholder is covered, although some of the higher end policies will include your spouse and children under the age of 19 travelling with you. There are many stipulations for this additional coverage and you will need to contact your credit card company directly to work out the details.
Medical Insurance
In terms of medical insurance, the majority of credit cards will cover international medical insurance, which is a big plus. The downside to this cover is most of the companies will not provide cover to people with pre-existing medical conditions like asthma and diabetes. On the other hand, standalone policies, like the travel insurance policies you can get at youGo Travel Insurance, will provide pre-existing medical cover.
Keep in mind that this overview is not true for every credit card travel insurance policy, but instead outlines typical credit card travel insurance features. Please read your specific travel insurance policy for more detailed information that is pertinent to your holiday.
Tips to Be Sure You Aren’t Under-insured
Eligibility
If you want to use the travel insurance on your credit card, be sure you meet the eligibility requirements before you consider the decision made. You can’t just jump on a plane and take off to faraway lands without doing some work first. Across the board, credit card travel insurance has to be activated by spending between $500-1,000 on pre-paid transportation costs with the credit card.
Excess Limits
No one wants their stuff to get nicked while travelling, and while you may be upset that your goods are gone, you’ll be even more upset when you find out the levels of excess attached to your credit card aren’t worthwhile. Stand-alone travel insurance policies often offer variable excesses ($100-$300), but credit card travel insurance excess levels hover closer to $500.
Expiry Dates
Be aware of your travel expiry dates. Most credit card travel insurances cannot be extended so be sure you know how long you’ll be covered for before you take off. If you are planning a longer trip or want to be able to extend the policy, it may be more useful to check out stand-alone travel insurance options over the basic credit card travel insurance.
Domestic Travel
Most credit card companies will not cover domestic travel. So, if you are headed to the Uluru or the Great Barrier Reef, you’ll be out of luck. Consider alternative travel insurance for any trips you take around Australia.
Internationally Accepted?
One major bonus to using a travel insurance policy from a credit card company is that they are accepted globally, which makes them pretty easy to use if you get yourself into a sticky situation when travelling abroad.
Read the Fine Print
We cannot stress this enough: before you leave on you big holiday, it’s imperative that you read your policy very closely and check the fine print. Be sure to read through the exclusions and common reasons for denying claims so you can avoid any unfortunate scenarios that would allow your claim to be denied.