The key things to know about complimentary travel insurance cover

It used to be that the travel insurance that came with credit cards was pretty basic, but that’s not necessarily the case these days.

Recent research from both comparison site finder.com.au and consumer advocate Choice found that some of the travel insurance policies offered through today’s high-end credit cards stack up pretty well against standalone policies. But as with any insurance policy, it’s critical to check the fine print, particularly around the limits of your coverage.

“Our line has always been that some basic insurance is better than none but that the travel insurance on cards isn’t great,” Bessie Hassan, money expert at finder.com.au, says. “You should still be trying to go through your direct travel policy. However, [credit card-connected cover] has really ramped up.

“There are some great offers out there and some are comparable to the direct standalone travel policies that are available. So, if your card does come with complimentary insurance, check what’s included and you can always upgrade it if you need to.”

How do you use your credit card travel insurance?

Depending on the credit card provider, you may be automatically eligible for complimentary overseas travel insurance or you may need to meet certain criteria to be eligible to claim under the policy. These criteria typically require you to spend a minimum amount on prepaid travel expenses such as flights, be under a certain age and have a return ticket.

For example, cardholders of a range of Westpac’s Platinum and Black credit cards are eligible for complimentary insurance if:

• They permanently reside in Australia or hold a current, valid residency and live in Australia, and
• They spend at least $500 on prepaid travel costs before they leave Australia, and these costs are charged to one of Westpac’s eligible cards, and
• They have a return overseas travel ticket before leaving Australia, and
• They are not over 80 years of age.

Meanwhile, some credit card policies require you to let the card provider know you’re going to be travelling, while other policies will also automatically cover your spouse and children if they meet the eligibility criteria – so it really pays to investigate all of the conditions to see if your covered.

Other things to look out for

One of the most important things for over-60s to consider when looking at both credit card travel insurance or a stand-alone policy are clauses about age restrictions and pre-existing medical conditions. It’s also critical to disclose any pre-existing medical conditions to your insurer at the time you take out your policy.

Brendon Dyer, the general manager of Allianz Travel, says this is to ensure you have adequate coverage for the countries you’re travelling to and the activities you might wish to undertake, and to reduce the risk of any medical-related claims being refused if you happen to fall ill before or during your trip.

“We do ask people to declare any pre-existing medical conditions and we do look at those,” Dyer says. “There are a range of pre-existing medical conditions that are actually covered by general policies without paying any additional premium, but then, of course, there are others that if people declare in advance, we do have to charge an additional premium for.”

Finder.com.au found that stand-alone policies were often more suitable if you do have an existing health problem because some of credit card travel insurance policies don’t allow you to extend the policy to cover your condition, even by paying an additional premium.

It’s also worth checking how many days’ travel per trip (and per year) is included. Choice notes that “if you’re a regular traveller, either an annual multi-trip policy or complimentary travel insurance on your credit card can provide a good-value solution”.

But this is where you need to check the duration of the coverage. According to Choice, the typical coverage period for annual multi-trip travel insurance ranges from 15 days to three months, while credit card travel insurance ranges from 45 days up to six months.

Excesses are another element you need to be aware of with both types of policy.

If you make a claim, the standard excess for complimentary credit card travel insurance could be about $250, which is more than double the typical excess on a stand-alone travel insurance policy, Choice notes.

The cost of travel insurance policies is often at the forefront of traveller’s minds, and this is where you need to consider the overall cost of having a credit card and using any complimentary insurance you maybe be eligible for. While there is technically no premium for travel insurance through your credit card, it’s likely that your card is incurring costs such as an annual card fee, standard interest rate, foreign currency transaction fees when used overseas or purchasing good from abroad, cash advance fees rates and fees, and other fees and charges – so it’s worth weighing up both options.

Whether travel insurance through a credit card or standalone policy is the best option for you depends on your personal circumstances, but whichever option you decide to go with, there is one thing of which you can be assured: you’re better to leave home with travel insurance than without it.

Things you should know: This information does not take into account your personal circumstances and is general in nature. It is intended as an overview only and it should not be considered a comprehensive statement on any matter or relied upon as such. Before making a decision, it’s best to read the relevant terms and conditions available at westpac.com.au. Fees and charges apply and may change. This information is intended as factual information, and not as financial advice. It is an overview only and it should not be considered a comprehensive statement on any matter or relied upon as such. © Westpac Banking Corporation ABN 33 007 457 141 AFSL and Australian credit licence 233714

Do you prefer relying on your complimentary credit card insurance or taking out a specific stand-alone travel insurance policy?