Compare credit cards that offer complimentary travel insurance

Looking for the real deal when it comes to travel insurance, but don’t want to pay a fortune for it? 

When it comes to credit card features, free travel insurance is one of the most demanded. According to CANSTAR’s website usage data, “Complimentary Travel Insurance” was the second most clicked feature on CANSTAR’s credit cards comparison table from January to July this year (2016). Many Kiwi travellers are looking for a credit card that includes this free cover.

But how do you know if it will be enough? Can free travel insurance on your credit card ever be as good as a “real” travel insurance policy? Will credit cards with free travel insurance included charge a higher annual fee to make up for that extra benefit?

As we’ve talked about before, credit cards with complimentary travel insurance can be great but you absolutely must check beforehand what the policy will cover. Many credit cards do not include as much cover as a standalone travel insurance policy that you buy separately. Some credit card travel insurance policies also do not cover more than just the cardholder, so you still have to buy separate policies for your spouse and kids.

Thankfully, some cards rise above the pack and offer all the cover you could expect from a standalone travel insurance policy.

Below, we’ve summarised what’s on offer from the 16 credit cards with free travel insurance we have rated.

Compare Travel Credit Cards

 

4 Things you should know before diving in with credit card travel insurance

1. Credit cards with free travel insurance can have higher fees/interest rates

Complimentary travel insurance is a ‘premium’ feature, so cards that have it usually have a higher annual fee and interest rate than other cards. This isn’t always the case, but CANSTAR research found the following averages this year:

Travel Insurance? Average Annual Fee Average Purchase Rate
(p.a.)
With Travel Insurance $243.38 19.88%
Without Travel Insurance $46.89 18.87%
All Cards Average $118.34 19.23%
Source: www.canstar.co.nz. Rates and fees as at 17 August 2016.

2. How travel insurance is activated

How travel insurance is activated

Travel insurance is activated differently depending on the card. Generally, travel insurance can be “turned on” in three different ways:

  • Purchase: Usually, your travel insurance is automatically activated when making any travel-related purchases on the card, such as flights and accommodation. 16 out of the 16 cards we rated this year require you to buy a return flight ticket in order to activate and start your coverage. Also, 3 out of the 16 cards require to make a minimum spend of $250 in prepaid travel expenses (e.g. flights, accommodation, etc.) in order to activate the policy. Many cards allow supplementary card holders (often only if they’re an immediate relative) to activate the insurance coverage with a purchase, but some others don’t.
  • Rewards point purchase: You can also activate your credit card’s travel insurance by making travel purchases with your rewards points, with 8 out of 16 cards. Some cards might require a minimum points balance to allow this though.
  • Notification: On other cards, the provider might simply require to be manually notified of when you wish to activate travel insurance. At the time of writing, only BNZ cards allow customers to notify the bank using their online banking portal in order to activate the policy.

Make sure you carefully check the terms and conditions of the card you choose, to ensure that you’ve met the travel insurance activation requirements.

 

3. Coverage can vary

ravel insurance on credit cards

 

The free travel insurance on credit cards can range from a basic policy to really comprehensive coverage. Complimentary card insurance and stand alone have some differences in terms of what they include and exclude.

The main difference is that with the complimentary insurance, you basically take what you are given and don’t have the ability to customise your cover for your individual needs. As such, it really depends on the individual whether it is a good idea to just use the insurance that comes with your card.

International or Domestic? Most credit cards with free travel insurance will provide coverage for overseas trips only. But as you can see in the table below, there are quite a few included policies that also cover domestic trips. Travel insurance generally covers overseas medical emergencies, cancellation fees, accidental death, lost or damaged personal goods, rental vehicle excess and many other things.

Who is covered? Along with having different types of coverage, the free travel insurance on credit cards can vary with regards to who the coverage extends to. For instance, most card policies will also cover spouses and dependents, but others might not.

Is the level of cover enough? The level of cover for inclusions will typically be less on a complimentary credit card policy. The complimentary insurance might be perfectly fine (assuming you meet the activation clauses) if you are taking a short trip across to NZ and plan to rent a car and would like to save on rental car excess.

However, if you were planning on travelling for a ski trip to the USA, it would not be appropriate as the cover would likely exclude certain high risk activities (like skiing), and the medical coverage limit may only be $250k (Amex Platinum Card NZ insurance). By purchasing standalone insurance for such a long-haul trip, you could include your skiing activity and insure you have unlimited medical coverage.

Travel accident and travel inconvenience insurance: Most premium cards include ‘travel accident insurance’ and ‘travel inconvenience insurance’ in addition to the main policy, but others miss out. On the other hand, there are some cards that only cover ‘travel accidents’ and ‘travel inconvenience’ and nothing else.

(Travel accident insurance is cover for accidental death and injury incurred as a passenger on transport such as a plane, bus, train or ferry. Travel inconvenience insurance is cover for the typical travel mishaps such as lost luggage, flight delay or forced arrangement cancellations. It can also cover funeral expenses in the case of an accidental death while travelling.)

 

4. Read the PDS!

Compare credit cards that offer complimentary travel insurance

Ensure that you thoroughly read the relevant credit card insurance product disclosure statement (PDS) when assessing a credit card’s free travel insurance. This will detail exactly what is and isn’t covered under the policy, along with all other terms and conditions.

Credit cards with free travel insurance

As at 17 August 2016, these are the credit cards on CANSTAR’s database that offer free travel insurance. Check out our credit cards comparison table for fees, rates and other product information on these cards.

Provider Product Domestic or International? Max # days of cover Activated by… Min purchase to activate ($) Reward point purchase can activate?
American Express Air New Zealand Platinum Card International 180 days Purchase 0 Yes
American Express Platinum Card International 183 days Purchase 0 Yes
American Express Platinum Edge Credit Card Both 90 days Purchase 0 Yes
ANZ Bank Airpoints Visa Platinum International 90 days Purchase 0 No
ANZ Bank Cashback Platinum MasterCard International 90 days Purchase 0 No
ANZ Bank Cashback Visa Platinum International 90 days Purchase 0 No
ANZ Bank Qantas Visa Platinum International 90 days Purchase 0 No
ASB Bank Visa Gold International 90 days Purchase 0 Yes
ASB Bank Visa Platinum International 120 days Purchase 0 Yes
BNZ Advantage Visa Platinum International 90 days Purchase 0 Yes
Kiwibank Airpoints Platinum MasterCard International 40 days Purchase 0 No
Kiwibank MasterCard Gold International 40 days Purchase 0 No
Westpac Airpoints Platinum MasterCard International 35 days Purchase 250 Yes
Westpac Airpoints World MasterCard International 120 days Purchase 0 No
Westpac hotpoints Platinum MasterCard International 35 days Purchase 250 Yes
Westpac hotpoints World MasterCard International 120 days Purchase 250 Yes
Source: www.canstar.co.nz Data collected 17 August 2016.

 

You can compare travel credit cards on our website.

Compare Travel Credit Cards

You can find out more about how to get travel insurance through your credit card in our annual Travel Credit Card star ratings report or Credit Cards star ratings report.

Read more about Travel Credit Cards

CANSTAR is an information provider and in giving you product information CANSTAR is not making any suggestion or recommendation about a particular credit product. If you decided to apply for a credit card, you will deal directly with a financial institution, and not with CANSTAR. Rates and product information should be confirmed with the relevant financial institution. For more information, read our detailed disclosure, important notes and additional information.

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