What cover do you get with credit card travel insurance?
The travel insurance that’s included with some credit cards covers most of the same risks as the standalone travel insurance available directly from insurance companies.
The main difference with credit card travel insurance is the cover is standardised for all cardholders. With some limited exceptions, you're not able to tailor the cover to your specific trip or needs, like you can with most standalone policies.
Each credit card’s travel insurance inclusions will vary (as with standalone policies) but there are four main types of cover that may be included:
Overseas travel insurance
Covers a range of risks related to an overseas trip, including medical costs, travel cancellations and loss or damage of luggage.
Interstate flight inconvenience cover
Provides protection for domestic travel against cancellations, delays and luggage loss. Around 94% of cards offering international travel insurance also offer this kind of domestic cover, Money.com.au’s analysis shows.
Transit accident insurance
Pays a benefit if someone covered by the policy is killed or injured in an accident while travelling. This may cover international trips, domestic or both.
Rental vehicle excess cover
Covers the policyholder for part or all of the excess payable if a rental car is damaged. This may apply to cars hired in Australia, overseas, or both, depending on the card’s policy.
How to choose the best credit card with travel insurance included
Travel insurance inclusions
Assess the policy's suitability for you. The Australian Government's Smartraveller travel insurance guide says you should consider your travel habits (destination, trip duration, activities and trip cost), plus your age, health and what valuables you'll be travelling with.
Annual fee
This is often the biggest cost of having a credit card. Not surprisingly, credit cards offering travel insurance tend to come with higher fees than no-frills cards. But there are some low-fee offers available (e.g. under $100).
Interest rate
If you will ever carry a balance on the credit card beyond the interest-free period, opting for a low rate credit card will save you money.
Interest free days
Most credit cards offer up to 55 days interest-free on purchases, which is the standard maximum. Some cards provide fewer days, while a small number extend this period with a longer interest-free window.
International fees
If you will be using it while you’re travelling (or paying for overseas purchases while at home), opting for one of the credit cards with no international fees could save you money.
Rewards
Look at both the number of points you’ll earn per $1 spend as well as any sign up bonuses. If it's a cashback credit card, look at the percentage of spending you get back. Some cards offer other rewards perks, including cards that come with airport lounge access.
Comparing credit card travel insurance to a standalone policy
Sean Callery, Editor of Money.com.au
"I recently compared travel insurance options for a two-week family trip to the United States. I was surprised to see that the cover I get through my credit card (inclusions and claim limits) is very similar to the standalone policies I looked at – only much cheaper.
My credit card (Westpac Altitude – Qantas) has an annual cost of $250. Each standalone policy I looked at would have cost considerably more than that.
My credit card also earns me around 25,000 Qantas points per year on average (I’m not a massive credit card spender). That’s worth about $100 if converted to a gift card with most retailers. The table below shows a summary of how I compared the options."
Sean Callery, Editor of Money.com.au
| Credit card travel insurance (issued by Allianz Australia) | Standalone policy 1 (Cover More international comprehensive) | Standalone policy 2 (Allianz Australia comprehensive) | |
|---|---|---|---|
Policy premium quoted | n/a (credit card annual cost is is $250) | $651 | $410 |
Standard claim excess | $300 | $250 | $200 |
Who is covered? | Cardholders, their spouses and/or dependants | 2 adults, 1 child | 2 adults, 1 child |
Cover period | Up to 3 consecutive months | 2 weeks (but can be tailored to your trip) | 2 weeks (but can be tailored to your trip) |
Overseas hospital cover limit | Unlimited | Unlimited | Unlimited |
Emergency dental | $2,000 per person | $2,000 | Unlimited |
Emergency accommodation | Unlimited | Unlimited | $100,000 |
Rental vehicle excess | $5,500 | $5,000 | $6,000 |
Luggage and travel documents | $20,000/person (up to $30,000 total) with sub-limit of $5,500 per item | $15,000 (sub-limits apply) | $20,000 (luggage), $10,000 (docs) |
Trip cancellation | Unlimited | $10,000 (can be tailored to your trip) | $10,000 (can be tailored to your trip) |
Travel delay expenses | $500 per person, up to $1,100 total | $2,000 | $2,000 |
Is credit card travel insurance worth it?
The travel insurance that comes included with credit cards tends to compare well to standalone travel insurance based on cost. It’s included in your card’s annual fee after all, so there is no additional cost.
The main trade-off is flexibility. Credit card travel insurance falls under what’s known as a 'group policy'. This kind of cover applies in the same way for all policyholders. In other words, there is very little scope to tailor the cover if the standard inclusions don’t suit you or your trip.
In my case (outlined above), the generic cover was fine, but that won’t be true of all trips and travellers.
We asked more than 1,000 Australians whether they trust the travel insurance that comes with their credit card.
Almost one in three (31.1%) said they trust their card’s travel insurance to cover them. Meanwhile, 19.3% said it’s not reliable, 16.7% said their card doesn’t include travel insurance, and 12% weren’t sure if it did.
Pros and cons of credit card travel insurance
Pros
- No additional cost beyond the cost of your credit card (the annual fee is the main fee, but there are credit cards with no annual fee that offer complimentary insurance).
- The standard inclusions, exclusions, limits and other policy conditions are typically similar to what you can get with a basic standalone policy.
- Having your travel insurance included means one less thing to do when booking your trip.
- Your card may offer other travel perks – e.g. frequent flyer points and in some cases no international transaction fees.
Cons
- Nearly all credit cards offering travel insurance have an annual fee. The average among cards analysed by Money.com.au is $292, but can be as high as $1,450.
- The cover is usually generic for all cardholders. For more complex situations where a higher level of cover is required, the cover included may not be suitable. Some card providers (e.g. Commbank) allow you to upgrade your cover for an extra fee.
- The cover usually does not apply automatically. You need to ‘activate’ it. In many cases, that means using your card to book the trip.
Expert’s view on credit card travel insurance
Brad Kelly, Credit Card Expert
"Some people don't trust card-based travel insurance, but I don't really understand why. Maybe I'm the only person who actually reads product disclosure statements, but when you look into what’s behind these insurance policies, they are issued by the big insurance companies and the inclusions are usually very generous. Just don’t assume it’s going to be right for everyone. Look into the details and check if it's what you need."
Brad Kelly, Credit Card Expert
How to activate your credit card travel insurance
The travel insurance included with your credit card usually needs to be activated before you’re eligible for cover. If you don’t meet the activation requirements, you generally won’t be covered – and any claim you make may be denied.
Money.com.au reviewed dozens of credit card insurance policies and, in most cases, you’ll need to do one or both of the following to activate your cover:
- Pay for all or part of your eligible trip using the credit card. Some providers also accept partial payment with the card, but paying entirely with reward points may not activate the insurance.
- Opt in to activate the cover. This may mean registering online, via your bank’s mobile app, or by contacting the insurer directly.
Always check the terms and conditions of your specific card, as the rules can vary widely between providers. Don’t assume you’re covered until you’ve confirmed the activation steps and received confirmation from your card issuer or insurer.
Activating travel insurance with the major providers
Here are the rules for activating your travel insurance with eligible credit cards with Australia’s major credit card providers.
- American Express: For return international trips, you must pay the full amount of your outbound ticket for a scheduled flight or cruise leaving Australia using a current American Express credit card account and/or corresponding American Express Membership Rewards/frequent flyer points or travel benefit.
- ANZ: Before leaving Australia you must spend at least $250 on your prepaid travel costs and charge these costs to the account holder’s card account.
- Commbank: Overseas medical and liability cover applies automatically. But for other aspects of overseas travel cover, you must activate the policy online (no fee or minimum spend applies) before you leave Australia. If you activate the cover after you leave Australia, a three-day no-cover period will apply.
- NAB: You must charge at least $500 of your prepaid travel costs to the account holder’s card account. NAB is also the issuer of Qantas credit cards (ones sold directly by the airline), as well as BOQ credit cards.
- Westpac: Before leaving Australia you must spend at least $500 on prepaid travel costs and charge these costs (e.g. cost of your return overseas travel ticket or accommodation) to the account holder's card account.
8 things to check before relying on credit card travel insurance
Before you depend on your credit card’s travel insurance, make sure you understand the limits and eligibility rules. Key things to check include:
Are you eligible to be covered?
Cover often depends on your age and other personal factors.
Is your trip eligible?
Most policies only apply to return trips that start in Australia.
Will your travel companions be covered?
Typically just the cardholder, their spouse and dependents are covered. Friends travelling with you usually won’t be included.
Is the cover duration long enough?
Cover usually lasts a maximum of three to six consecutive months.
Will any pre-existing conditions be covered?
Some conditions may be covered, but many are excluded unless specifically approved (check the T&Cs).
Have you activated the policy?
You may need to pay for part or all of the trip with your card. Or, you may have to opt in before you’re covered.
Will any risky activities be covered?
“Extreme” or high-risk activities may not be covered (i.e. skiing/snowboarding).
Is the policy generally suitable?
Based on your situation and the kind of trip you’re undertaking. In some cases, standalone travel insurance may be a more suitable option.
