What You Need To Know About
Credit Card Travel Insurance

These days, many consumers forgo standalone travel insurance in favour of credit card travel insurance from major credit card providers like Commonwealth Bank, ANZ, Westpac, and NAB. It’s a convenient option, but before you make a choice, it pays to be informed.

One of the first things to note is that not all credit cards even offer insurance. It seems like a no-brainer, but many people with a credit card assume all credit cards have free travel insurance.


Another thing to remember is to activate your credit card travel insurance. To activate, many cards require you to use your card to book your flights - but different cards may have different activation methods, such as notifying the provider, or booking travel through a particular service. If you don’t activate your insurance properly, then you might end up with no coverage at all. 

Additionally, not all cards automatically provide travel insurance, and those that do are generally premium cards that charge higher fees and greater excesses. 

Most credit cards that offer travel insurance provide basic coverage that includes spouses and dependants travelling together, but typically there’s a cap on how long you can be away - which might not suit you if you’re going on an extended trip. 

So, whether you opt for credit card insurance or use a stand-alone provider, read this helpful guide before you make a final decision.

Compare credit card travel insurance
vs specialist travel insurance

Credit Card Travel Insurance Standalone Travel Insurance

Must often book travel through the card to qualify, or spend a minimum on pre booking. There might also be a requirement to book travel through affiliated agencies. 

Can be purchased after obtaining tickets, regardless of how travel was booked.

May need to be activated before coming into effect, or taking full effect.

 

Would come into effect whenever you buy the policy, which means you’re often covered for cancellation costs before you leave. 

Medical expenses may be capped, for example, at $500,000.

Many policies offer unlimited coverage.

May firmly exclude many pre-existing conditions.

Usually, you will be able to negotiate coverage for pre-existing conditions by paying a higher premium. Or you can get a policy that excludes your pre-existing condition.

Upper or lower age limits may apply.

‘Age loading’ of premiums — increasing the price to cover the perceived higher risk of covering older people — makes it easier to tailor policies different generations.

Are often limited to a maximum time period, often three months, or even 30 days.

Longer periods of travel are more easily catered for, as well as the possibility of extending coverage.

Usually comes with higher excess.

Excess on claims can be as low as $100.

May exclude ‘extreme’ sports, or even activities as mainstream as skiing.

Many high-risk activities will be included, depending on the insurer.

Often covers loss or theft of cash.

Loss of cash is not generally covered under standalone policies.

Cost is free with credit card membership (in accordance with set conditions).

Cost ranges from under $50 to up to $500, depending on your circumstances.

Claims process is often taken care of by a third party and not the insurance supplier. 

Claims process is generally taken care of by the supplier themselves.

May exclude ‘extreme’ sports, or even activities as mainstream as skiing.

Many high-risk activities will be included, depending on the insurer.

 

What's the best credit card travel insurance?

The best credit card travel insurance is the one you’re researching thoroughly before you go. The reason for that is everyone has different needs and circumstances. Some people are older travellers with pre-existing medical conditions, some people only want medical costs covered, some people are going on long-term travel for a few months or longer, and some people are going skiing or cruising. 

Then there are others who are only travelling domestically and want a cheaper policy to match. 

All of these circumstances - and more - will affect the type of travel insurance you get. In terms of credit card travel insurers, it’s best to research and pay close attention to the exclusions. 

To start you off, you can start by researching some of the well-known providers of credit card travel insurance
Australia Banks:     Commonwealth Bank, ANZ, Westpac, NAB, Citibank
Australian Airlines:   Qantas, Virgin Australia, Jetstar
New Zealand Banks:   Bank of New Zealand, ANZ Bank New Zealand
New Zealand Airlines:    Air New Zealand (stand-alone travel insurance) 
Credit Card Providers:    American Express Australia, American Express New Zealand

 

Should I get Credit Card Travel Insurance?

Credit Cards

Unlike many types of credit card travel insurance, stand-alone travel insurance can be purchased at any time before your trip. This often means that, in many situations, you’ll be covered for cancellation costs if you can’t go on your trip - all from the moment you get travel insurance.

On the flipside, because credit card travel insurance isn’t purchased, it might only come into effect when you book your flight, or take another action determined by your provider. 

Flexibility and customisation is more difficult with credit card travel insurance, whereas stand-alone options provide up-front flexibility to customise policies for your specific purposes. That’s why many people who have unique circumstances prefer the transparency and flexibility of a standalone policy. 

However, all travel insurance has degrees of coverage and exclusions, so no matter which option you go with, it’s important to make sure that you understand exactly what you are and what you’re not covered for. 

Credit Card Travel Insurance FAQs

  • Does credit card insurance cover coronavirus?
  • Most credit card insurance is underwritten by major Australian insurers, and whether you've covered for Coronavirus related claims will depend on which insurer your credit card provider uses. You may be in luck depending on the credit card provider you've used, but you'll need to check their individual policies and cut-off dates. 

    The other things to keep in mind is that even if Coronavirus-related claims are covered. For example, you may have had to have booked a minimum amount of your trip on your card, or you might have had to have activated your travel insurance before it can be claimed against. 

  • Does travel insurance come with all credit cards?
  • No, ‘free’ travel insurance is not offered on every card. It’s generally only offered on premium cards with higher annual fees.

  • Is credit card insurance automatically provided?
  • No. Many credit card plans will only cover you when you’ve satisfied a requirement, like booking a part of your trip with the card. For many credit card travel insurance providers, the part of your journey that you need to book with your credit card are your incoming and outgoing flights. For others, it might be just a portion of your flights, or some of your accommodation, etc. 

    If you have several credit cards but pay for your tickets and other travel arrangements with one that doesn’t offer insurance, then you might not be covered.

  • Does credit card insurance apply with a one-way ticket?
  • This is another situation where it pays to check with your credit card insurance provider, as many do not cover open-ended or one-way trips.

  • Does credit card insurance cover the whole family?
  • Credit card travel insurance, correctly activated, always covers the primary cardholder, and sometimes (depending on how comprehensive the policy is) covers their spouse and dependent children as well.

    However, family members generally need to travel with the primary cardholder for the duration of the trip, and usually their travel must have been partly or entirely purchased with the same card. Always check the criteria and see if your spouse or children need extra coverage. 

    If you’re a grandparent travelling with your grandchildren, you need to check that you have coverage for them, because different companies have their own take on what a “dependant” means. 

  • How is credit card travel insurance activated?
  • It depends. Some credit card policies are activated at the start of travel — which almost always means the outgoing flight, while some must be activated online. Others come into effect automatically, but must be ‘registered’ online to take advantage of the full offer.  Unfortunately, the fact that a lot of credit card coverage doesn’t cover you before you leave can mean being financially out of pocket if you need to cancel your trip.

  • Is it easy to claim under credit card travel insurance?
  • It might be a lot harder to claim under credit card insurance, because the people who sell you the insurance aren’t the same people you claim through. The more complicated the claim, the more difficult it might be. Do your research and find out what people say about the claiming process with any travel insurance that you get. 

    Many stand-alone travel insurers have in-house sales and claim team, so the people you buy your travel insurance from are the very same people who'll help you if you need to claim. This is especially important if you want to speak to someone back home when you’re in trouble overseas.

  • Do I get cancellation cover with credit card travel insurance?
  • In some circumstances, credit card insurance policies won't come into effect until you’ve actually started travelling. In other words, if a medical, personal, or geopolitical crisis stops you from taking that first flight, nothing will be covered. A standalone policy, on the other hand, will generally kick in the moment you buy it - often months before travel commences.

  • Am I covered by credit card travel insurance if I’m Travelling domestically?
  • Most credit cards with free travel insurance provide coverage for overseas trips only, so you need to check if there’s a domestic inclusion.

  • Do credit card providers  - like banks or airlines -  get a commision from their insurance partner?
  • Mostly, yes. And it’s not just banks, but airlines as well. Insurers play off the brand of the bank or airline they’re providing insurance through, and they generally need to pay for this partnership. 

    However, the commissions and rates will vary, so it’s always best to check the PDS of any travel insurance that you’re considering.

  • Does credit card travel insurance cover you dangerous territories?
  • It’s unlikely that any travel insurance provider will cover you if you choose to travel somewhere that’s known to be unsafe (e.g. it’s been reported in the mass media or the Australian government has issued a warning about it). The big difference is that an established, dedicated travel insurer will generally provide notice of the exclusion on their website, so at least you can make an informed decision before going to a particularly risky destination. If you’re using credit card insurance, this information may require a little more digging.

 

Special Circumstances: Pre Existing Medical Conditions

Whenever you have complicated or unusual circumstances, your travel insurer is going to need to know about it so they can charge you the appropriate premiums. 

For example, if you or your travel companions fall outside the prescribed age limits, or if you have pre-existing medical conditions, your insurer needs to know. The problem is, most people never have any direct contact with their credit card insurer. They tend to activate the insurance and that’s it. 

Of course, it’s possible to contact the insurance provider for your credit card to negotiate expanded coverage, but ask many people, and they usually don’t know who is the end provider of their credit card travel insurance. 

Essentially, if you rely on your ‘automatic’ coverage, and you have circumstances that are a little different, you might find out you’re not covered at all when something does go wrong.
 

Credit card travel insurance

The failure to declare pre-existing medical conditions is a very common reason people get their travel insurance claims denied. It’s very important to call your card’s insurance provider directly to ensure that nothing in your own circumstances will result in being denied coverage under their policy later. 

It’s also important to note that some credit card travel insurance policies won't automatically cover any pre-existing conditions, and some companies won't allow you to apply to get cover for your condition by paying an additional premium.

Ideally, if you have a pre-existing condition, you’ll be able to negotiate coverage for an additional fee. Just make sure to get confirmation in writing of any such arrangement, visit your doctor to get official clearance for travel ⁠— with documentation ⁠— and keep records of all paperwork. 

Remember that even if a condition has been treated with surgery or medication, and appears to be resolved, it still may be considered as a pre-existing medical conditions by insurers. If in doubt, check with your insurance provider.

Standalone travel insurance

Standalone travel insurance automatically covers many pre-existing medical conditions, and, for conditions that aren’t automatically covered, you may have the following options:

  • You can obtain travel insurance, but might have to pay for your pre-existing condition to be covered 
  • You can obtain travel insurance but it will be mandatory to purchase coverage for your pre-exisiting condition 
  • Your condition won't be covered at all, but you can still purchase travel insurance that can cover you for events not related to your condition. 

Or, you might not be able to get insurance at all, but at least you'll know about it up front. 

Special Circumstances: Pregnancy

credit card travel insurance

Pregnant women are excluded from cover by some credit card insurers  Even if you are able to negotiate some sort of coverage under a credit card policy, there may be restrictions on claims, higher excesses, and increases in premiums. 

Standalone Travel Insurance

Many standalone travel insurers, can cover pregnant women through the second trimester, but it’s always essential to understand exactly how these provisions will apply to you personally. Restrictions generally apply. Childbirth or regular ante-natal care, for example, will always be at your expense. If you're worried about anything at all to do with your pregnancy and travel insurer, make sure you ask!

Special Circumstances: Disabilities

Credit Card Travel Insurance

Generally speaking, if you have a disability it’s not compulsory to declare it to your insurer. However, there is no blanket rule so it’s really best to check if your disability is covered from the get-go. 

If you're the cardholder traveling with a spouse or dependent child who has a disability, it’s also best to call and make sure that they will be covered under your card’s travel insurance. Do you have any particular equipment that will require coverage? Make sure your policy includes wheelchairs, hearing aids or other essential pieces of apparatus.

Travel Insurer Of The Year 2019

 

Credit card travel insurance: Top 7 Tips

If you do decide to go with credit card travel insurance, here are a few tips so you can make the most of it.

Ensure you’re actually getting “travel insurance”

Different cards may offer what seems like comprehensive travel insurance on the surface, but it might be another product altogether. These are the three types of insurance that you could be offered:

  • Travel accident insurance: This generally only covers emergencies that occur while on transport (cars, buses, trains, ferries, etc).
  • Travel inconvenience insurance: With some cards, you might not need to activate this kind of insurance, and it’s generally related to lost luggage, flight delays and forced cancellations.
  • Travel insurance: Amongst other things (check your policy), travel insurance can covers medical emergencies, accidental death, lost/damaged personal goods, & rental vehicle excess.

Some providers will offer travel accident insurance/travel inconvenience insurance on top of travel insurance, or they might just offer one of the three products. Make sure you understand exactly what you’re getting before you go overseas.

Make sure the insurance is activated (this is not always automatic)
  • Some credit card companies require you to ‘turn on’ the insurance online before you head off. Other companies don’t have this requirement, but  you may only be getting basic cover. If you’re unsure about your level of cover, contact your provider. 
  • Take note of what the minimum spend is to trigger your travel insurance. For example, if that minimum is $800, and your tickets cost $750, you won’t be covered.
  • A return ticket may be required to be eligible for coverage under some credit card travel insurers.
Make sure any pre-existing condition is declared
  • Even a run-of-the-mill prescription for sleeping pills or antibiotics in the past year can have an effect on your policy. If in doubt, discuss it with your provider. 
  • Additionally, you should make sure you have proof that you’ve declared your condition. 
Keep all your documentation
  • Make copies of your travel documents, drivers license, your tickets (for proof of travel), doctors certificates, receipts and valuations for any expensive items that may go astray, copies of your insurance papers and any additional coverage, credit cards, birth certificates, and whatever other documentation that could possibly come in handy. 
  • If something does happen, make sure you get a police report or local doctors reports, and keep copies.
Get adequate medical coverage for your destination

This is especially important if you’re going to countries like the US, where a short hospital stay could exceed the upper limits of your credit card policy. 

Shop around

If you’re considering applying for a new credit card specifically for its superior travel insurance offering, consider: 

  • Annual fees. How high are your annual fees and are they outweighing the cost of the travel insurance you’re getting?
  • Interest rates. A very high level of insurance could mean interest rates on your card are higher. 
  • 0% interest balance transfers. This standard enticement for new applicants can be particularly attractive when you’re contemplating spending a bundle on travel expenses.
  • Currency conversion fees. Some cards offer 0% for currency conversion, while others charge between 2 and 4%. This difference can really add up when you're shopping overseas.
  • Rewards points. Some cards allow the accrual of points from overseas spending, while others are more restrictive. One future benefit of rewards cards with decent travel insurance is that you may be able to activate the insurance for future trips through rewards points transactions. Make sure you ask!
Check provisions for Car Rental Excess and Activities insurance
  • Check whether your chosen activity/activities will be covered. Most credit card insurers offer 24 hour hotlines that can advise you whether an activity will be covered.
  • Some credit card insurance policies may not provide car rental insurance excess for all vehicles. For example, they might specify that the only types of cars they cover are sedans or station wagons.

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