Credit Card Travel Insurance, Is It Worth It?

Hands up if you’ve heard the saying, “If you can’t afford travel insurance, you can’t afford to travel”. Now, as cliché as that sounds, there is truth to the travel agent’s preachy sales speech.

Travel is all about adventure and experiencing new cultures, sights and food. However, just like at home, things can go wrong; we can fall sick, get stuck in a snowstorm, lose our wallet, miss a bus, or eat a very dodgy prawn (no more pad Thai for you).

Medical treatment, emergency flights and accommodation can cost a lot more than a Contiki tour, so it’s important you’re protected when overseas. But when it comes to choosing travel insurance, will ‘complimentary’ credit card travel insurance do the trick?

Let’s unpack the deal.

‘Complimentary’ credit card insurance isn’t exactly free. It’s typically only offered with premium cards that charge an annual fee – so you technically pay for the privilege.

There are often lots of conditions for your credit card insurance to be valid. Some common conditions can include:

• You must pay for your flights in full using the credit card.
• You must buy a return ticket.
• The airfare must be international.
• You must let the lender know your dates of travel and the countries you’re visiting.

Some credit card insurance policies will also require you to pay an excess. This means you may have to pay a fee for every claim you make (normally between $100—$200), cha-ching.

The level of cover offered by complimentary credit card insurance can also be pretty basic, only offering you protection for overseas medical expenses and emergency assistance. You may not be covered for:

• Any pre-existing medical conditions.
• Accidental damage to personal items, such as computers and phones.
• Theft of cash and personal items.
• Motorbike or scooter accidents.
• Activities deemed dangerous, like skiing, skydiving, bungee jumping or swimming with great white sharks.
• Longer trips. Some policies will only insure you for trips 31 days or less.
• Trip to destinations that have expensive health care or are considered a high safety risk are often not covered. These can include countries like the USA, Brazil and South Africa.

What should you look for in a travel insurance policy?

Choosing the right travel insurance policy is like choosing the right hotel – are you happy to keep it simple or do you want all the bells and whistles? However, regardless of style and budget, it’s important that your policy covers you for the following:

1. Medical expenses.

This includes hospital fees and medication. And don’t be fooled, overseas hospital stays can cost you hundreds of thousands of dollars – especially in the US.

2. Getting you back home.

If you fall sick, have an accident or in the worst case scenario die, you’ll want emergency repatriation.

3. Baggage cover.

Imagine arriving at your destination only to discover all your stuff has been lost or has ended up in Antigua. Or worse still that cute old lady at the market was actually helping herself to your wallet whilst you were browsing through her vintage scarves.

4. Cancellation costs.

If you have to cancel or shorten your trip, this covers you for any travel and accommodation costs you have paid for and can’t claim back.

Sourcing your own travel insurance can give you greater flexibility with fewer restrictions. (Especially if you’re planning on looking for anacondas in the Amazon.) And if that’s the case, choosing a credit card with no annual fee, low rates and no complimentary travel insurance could be a better idea than choosing a credit card with an annual fees and high interest rates just to get the ‘free’ travel insurance.

Food poisoning happens. Flight can get cancelled. Bad weather can cause havoc. So, before you jet off, compare a few different policies and pick one that gives you adequate cover. And remember, if you can’t afford travel insurance, you can’t afford to travel.