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Why Your Credit Cards’ Travel Insurance May Not Be Enough

blue carpet on aisle between seats

… This post has been brought to you by Fast Cover travel insurance …

Every year I buy one thing that I hope I never have to use.

Travel insurance.

Apart from not wanting to tempt fate and fearing that the first trip I dared to take without it would be the first time I needed it, I couldn’t imagine grabbing my passport without knowing I had a good travel insurance policy in place.

And while my credit card does have travel insurance included with my annual fee, I still choose to get a separate annual travel insurance policy every year.

That may seem strange to some who think that because their credit card has travel insurance they’re covered for every trip they’re going on.

But the thing is, that may not be the case, and you could be more vulnerable than you think.

As the CEO of Fast Cover travel insurance Dean Van Es puts it, “Travellers should ask themselves whether they would trust their bank to help them in an emergency situation overseas.”

Common Misunderstandings about Credit Card Travel Insurance

The level of travel insurance cover that credit cards offer can vary quite dramatically, and not surprisingly cards that have low annual fees and / or low interest rates usually have the worst policies.

My own credit card’s annual fee is only a couple of hundred dollars, and when I look at the card’s travel insurance policy there’s a note at the top explaining that in order for me to be able to use it, I have to purchase the full fare for a return trip on that credit card.

As a travel writer and blogger sometimes I’m invited to places by people who rather wonderfully take care of my flights. Which means I wouldn’t be covered by that credit card, and neither would anyone else whose work paid to send them on a trip.

Don't get the passport blues

It also means you may not be covered if you’re using your frequent flyer points, though some banks do allow it if it’s been booked through their own internal rewards programme.

Different companies have different policies, but I was surprised when I checked another credit card with a $1200 annual fee to see it had the same limitations on the trip needing to be purchased in full using that card before the cover applies.

Depending on your card, even if the trip is covered some other exclusions could include…

  • Age limits
  • Not covering your spouse or dependants
  • Limited duration for your trip
  • Limited regions including not covering domestic travel
  • Limited number of trips
  • Higher excess
  • Limited or restricted benefits
  • Requiring the purchase of a return ticket
  • Not covering cruises or winter sports

And then there’s the exclusion I was most surprised about.

Medical Expenses Are Not Fully Covered by Some Credit Cards

Losing a bag or having your camera stolen is one thing.

Needing to be medevaced back to Australia for life saving treatment is another.

Which is why the first thing I look at when choosing travel insurance is the medical coverage they offer.

And why it’s a bit scary to realise some credit cards, including those offered by a major Australian bank, don’t include 24 hour medical and travel assistance or unlimited overseas medical expenses.

Then there are those that offer limited or no death cover.

Dean Van Es says travellers need to look at their policies carefully.

“Travel insurance offers more than just the financial benefits, it also connects travellers with a 24-hour emergency assistance team that can help with anything from a lost passport to emergency life saving medical treatment anywhere in the world. If you found yourself in a scary situation overseas, would you trust your bank to provide the right advice and assistance in an emergency?”

Flying above clouds

Cost Effective Travel Insurance

Even if your credit card is a top of the line one with great insurance coverage, unless you are getting your money’s worth from the other benefits on the card you could come out ahead by buying travel insurance separately and using a credit card with a lower annual fee.

Another factor to be aware of is the amount of excess you may have to pay, with some credit card excess charges being as high as $500.

When it comes to stand alone coverage, frequent travellers should consider an annual or multi trip stand-alone insurance policy, which depending on your age and travel regions you can get for less than $350 a year.

Of course if your credit card does provide the sort of coverage that you’re after for a trip, that’s great news.

We all love to get something thrown in for nothing and save extra dollars for our holiday.

But before deciding to just go with your credit card’s coverage it’s best to really read the travel insurance policy from start to finish to see what is and isn’t included. After all this is one purchase that can cost you everything if you get it wrong.

“Price is always a main deciding factor when comparing products,” Van Es says, “But we’ve found very few people even remember the cost of a policy when an incident occurs.”

Travel Insurance Quote

This post has been brought to you by Fast Cover travel insurance.

You should always consider the Product Disclosure Statement and Policy Wording and your personal circumstances before making any decision about whether to acquire a travel insurance product. Adventures All Around does not and cannot provide any advice, opinion or recommendation about any insurance.

This post contains some affiliate links, so if you click on a link and buy something I will get a small percentage to help pay the blogging bills and keep my site ad free. But don’t worry, it’s absolutely no extra cost to you. Thanks!

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