Co-author: Dominic Beattie
Check out which credit cards on Canstar’s database offer complimentary travel insurance and compare how they differ.
What is credit card travel insurance?
Complimentary credit card travel insurance is a feature that is available on many credit cards – typically premium credit cards. A travel insurance policy included on a credit card may offer varying levels of coverage for you when travelling domestically or internationally (sometimes both).
Depending on the quality of the policy, complimentary credit card travel insurance can be used instead of a standalone travel insurance policy. This can help reduce travel costs overall and saves valuable time.
Complimentary insurance can cover a variety of unexpected circumstances that may arise while travelling, including:
- Medical cover for hospital and doctor expenses overseas
- Lost luggage or damaged property cover
- Cancellation fee cover if you have to unexpectedly cancel your trip due to events outside your control
- Travel inconvenience cover for cancelled or delayed flights
- Transit accident cover for injuries that occur while using some form of transport
- Legal liability cover in case you injure someone else or damage someone else’s property during your trip.
But the level of cover will vary from policy to policy – so be sure to check your policy before you rely on your credit card travel insurance.
It’s important to note that complimentary travel insurance is not really ‘free’. The travel insurance premium is paid for through the annual fee on the card.
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Compare credit cards with ‘free’ travel insurance
The table below displays a snapshot of credit cards on Canstar’s database that offer complimentary travel insurance, sorted by purchase rate (lowest first).
|Company||Product||Annual Fee||Purchase rate (p.a.)||Balance transfer|
|American Express||Platinum Edge Credit Card||$149||2.99% for 6 months, then 19.95% ongoing||Not available|
|Westpac||Airpoints World Mastercard||$390||16.95%||16.95%|
|Westpac||hotpoints World Mastercard||$390||16.95%||16.95%|
|Kiwi Bank||Mastercard Gold||$80||17.90%||1.99% for 6 months, then 17.9% ongoing|
|BNZ||Advantage Visa Platinum Cash Rewards||$90||18.95%||0% for 6 months, then 19.95% ongoing|
|American Express||Airpoints Platinum Card||$195||19.95%||Not available|
|ASB||Visa Platinum||$80||19.95%||0% for 6 months, then 19.95% ongoing|
|ANZ||Airpoints Visa Platinum||$150||20.95%||20.95%|
|ANZ||Cashback Visa Platinum||$125||20.95%||20.95%|
|Kiwi Bank||Airpoints Platinum Mastercard||$150||20.95%||1.99% for 6 months, then 20.95% ongoing|
|Westpac||Airpoints Platinum Mastercard||$145||20.95%||20.95%|
|Westpac||hotpoints Platinum Mastercard||$125||20.95%||20.95%|
|American Express||Platinum Card||$1,250||N/a (this card is a charge card)||N/a (this card is a charge card)|
Source: www.canstar.com.au. Rates and fees as at 2 November 2018.
Is credit card travel insurance worth it?
Credit cards with complimentary travel insurance can be a great way to save money, but it’s a good idea to check beforehand what the policy will cover. Travel insurance that comes with credit cards often does not include as much cover as a standalone travel insurance policy that you buy separately.
Some credit card travel insurance policies only cover the cardholder, so you may have to buy separate policies if you are travelling with your spouse or children.
Pros and cons of credit card travel insurance
- Frequent travellers may be able to save money on insurance
- Some policies offer similar benefits to a standalone travel insurance package
- Consumers don’t have to spend time comparing standalone insurance products
- Some credit card policies will also cover your spouse and children if they are travelling with you (as long as you activate the policy correctly)
- Card policies often continue to cover older travellers, whereas standalone travel insurance policies may charge higher premiums for older travellers
- A range of different international destinations are covered for the same ‘price’ (the annual fee of the card). With standalone travel policies, the price of your policy can depend on your destination.
- Complimentary travel insurance is considered a premium feature, so it is typically offered on rewards credit cards that have higher interest rates and annual fees
- Some credit card travel policies only cover international trips or domestic trips, so you need to check whether your destination is covered
- Travel insurance is activated differently across cards, which means you need to remember to activate your policy in order to be covered for your trip. You may have to pay for your flights, tours, or accommodation using the card in order to be covered
- Infrequent travellers may not benefit from complimentary travel insurance, as higher fees and interest rates on the credit card may make things more expensive in the long run
- Exclusions and an excess may still apply to complimentary travel insurance policies, so it’s still crucial to read the product disclosure statement (PDS) before signing up. For example, credit card travel policies often exclude activities such as skiing or watersports or other ‘adventure’ activities from cover
- Credit card travel insurance policies typically only cover trips of a certain length (e.g. 31 days or 3 months), so check your PDS before you set off on a longer getaway
- Cover may not be as extensive as standalone travel insurance policies. For example, some credit card policies cap cover for overseas emergency medical expenses at $500,000.
What to look out for when comparing credit cards with travel insurance
1. Credit cards with free travel insurance tend to have higher annual fees and interest rates
Complimentary travel insurance is a ‘premium’ feature, so cards that offer 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 in November 2018:
|Overseas travel insurance||Average Annual Fee||Average Purchase rate (p.a.)|
Credit cards with complimentary travel insurance tend to have higher annual fees, and higher levels of coverage are often associated with higher fees. Ensure that you assess whether you will use all the perks on a card with a higher annual fee, compared to a card that might be more cost-effective for you.
It’s important to identify the potential costs of purchase rates and cash advances, especially for credit card travel insurance plans that require you to prepay some of your trip expenses using the card in order to activate the insurance policy. You don’t want to be paying too much interest on your prepaid trip costs.
2. How travel insurance is activated
Travel insurance is activated differently depending on the card. Generally, credit card travel insurance policies can be activated in three different ways:
- Purchase: Your travel insurance could be automatically activated when making travel-related purchases on the card, such as flights and accommodation
- Rewards point purchase: You can also activate your credit card’s travel insurance by making travel purchases with your rewards points
- Notification: Some providers might simply require to be manually notified of when you wish to activate travel insurance.
Make sure you carefully check the terms and conditions of the card you choose, to ensure you have met the travel insurance activation requirements.
3. Travel insurance coverage can vary
Make sure you read the fine print to ensure your free travel insurance policy cover meets your needs. Some areas that could be easy to get caught out by include:
- Trip duration: How many days will it cover? Some credit card policies only cover trips up to three months long, while a standalone travel insurance policy can cover longer periods depending on your choice of policy
- Luggage: Will it cover lost belongings, or just theft or damaged personal goods? To what level are your belongings covered – is it enough to actually replace them if your entire suitcase or backpack is stolen?
- Cancellations: What is the policy if your flight or accommodation is cancelled at the last minute?
- Medical: What level of cover is provided for overseas emergency medical expenses? Standalone policies can offer up to unlimited cover for this, whereas many credit card policies cap this cover at a certain amount. If you have any pre-existing health conditions, ensure these are covered as well
- Activities: Are you covered for the activities you have planned to do during your trip? Many standalone travel insurance policies offer optional extra cover for things like skiing or watersports, whereas credit card policies often exclude these activities from cover.
Some premium cards include ‘travel accident insurance’ and ‘travel inconvenience insurance’ in addition to the main policy, but others don’t include this cover. On the other hand, there are some cards that only cover ‘travel accidents’ and travel inconvenience’ and do not provide traditional travel insurance cover:
- International/domestic travel insurance: Some credit cards with free travel insurance will provide coverage for overseas trips only. But there are quite a few policies that also cover domestic trips. Travel insurance generally covers overseas medical emergencies, cancellation fees, accidental death, lost or damaged personal goods, and more
- Travel accident insurance: Generally covers accidental death and injury incurred as a passenger on transport such as a plane, bus, train or ferry
- Travel inconvenience insurance: Generally covers 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.
Along with varying types of coverage, free travel insurance on credit cards can vary with regards to who the coverage extends to. For example, some card policies will also cover spouses and dependents, but others might not.
Some card policies that offer to cover your spouse or children might require you to spend an extra amount on the card in order to activate the policy for your spouse or children.
4. Currency conversion fee
If you plan to use your credit card while overseas, it’s important to identify your card’s currency conversion fee. Typically these surcharges are usually around $2.
It is important to weigh up all the options and find the credit card that will suit your travelling needs.
A reward credit card can also come with complimentary credit card insurance, which allows spenders to earn points while travelling. Some of these cards also allow you to use reward point purchases to activate the complimentary travel insurance plan.
6. What excess applies?
Don’t forget to check your PDS to find out what excess applies if you do need to make a claim on your credit card travel insurance. The excess on a credit card policy can be higher than some standalone travel insurance policies.
7. Read the PDS!
Ensure you thoroughly read the relevant credit card insurance PDS when assessing travel insurance that comes with credit cards. This will detail exactly what is and isn’t covered under the policy, along with all other terms and conditions.
Compare credit card travel insurance
Before you take flight and sign up for a new credit card, use Canstar website to compare credit cards to find a card with a travel insurance policy that may suit your travel and spending needs.
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