Credit cards with travel insurance: Should you risk it?

As a journalist I’m often asked what I think of credit card travel insurance. Is it good enough to rely on?

The answer is that when this blog is published I’ll be at the World Cup (football) in Brazil using my credit card travel insurance.

It wasn’t an instant decision not to buy separate travel insurance. My travel agent tried very hard to get me to buy her expensive product. But when I sat down and read my entire credit card travel insurance policy from start to finish I decided it was more than adequate for my trip.

After that exercise I can say hand on heart that it’s fallacy that credit card travel insurance is inferior. It’s not. There are one or two features of some, but not all high street policies that are better. But all in all my credit card policy is good.

 Travel Insurance Factors

Here are the factors that helped sway my decision:

  • Length of cover.

Many credit card travel insurers limit cover to 35 days, which isn’t enough. When I read my policy I found it covered me for 90 days. So it passed the first hurdle.

  • Activation.

Credit card travel insurance has a nasty little bit of fine print about “activation”. If the policy isn’t activated correctly there is no cover. In order for the cover to be activated, you need to jump through certain hoops. In my case it was charging 50% or more of the entire cost of my overseas return travel tickets to my credit card. Some, but not all banks allow you to use another account the same bank to pay for the tickets.

  • Extent of cover.

I read the section about cover very carefully indeed. There were 27 separate limits and sub limits and I can’t list them all. But the ones that were important for me were: $20,000 for luggage, $50,000 per person for personal accident, $3,000 for rental vehicle excess cover, delayed travel to a special event $5,000, and unlimited medical and evacuation expenses.

  • Age.

This was an easy one. My policy only covers people up to the age of 79. That’s fine. I’ve got decades to go until then. The ANZ Premium Card covers up to the age of 90. Regular insurer QBE, which sells through travel agents, has no age limit, but over the age of 70 you must complete a prelimary medical assessment, and may need to pay additional premiums or be given exclusions.  

  • Worldwide emergency assistance service.

My policy is underwritten by Tower Insurance, so like any Tower customer I can use the emergency assistance service.

  • Competitive sport.

My policy excludes cover for “competitive sport”. This was a real worry because we will be participating in some fun games of soccer when we’re away. When I contacted my bank, however, I was told in writing that if the games weren’t part of a “professional” soccer league or tournament we’d be covered.

  • Business cover.

I have no intention of doing any work whatsoever on my travels. But I have to accept that my journalistic radar is always on standby. So would my credit card insurance cover me? The answer was “yes”. The policy covers me for “leisure or business purposes”. It excludes manual work. But that’s fine

  • Tour cancellation.

My credit card only covers me for $4,000 whereas the QBE policy is $10,000. However I discovered that because my tour is with a bonded travel agent, I have cover there.

  • Credit card fraud.

One area that my credit card insurance doesn’t cover is any fraudulent use of credit cards that have been stolen. Replacing the card itself is covered. This is the one area where my credit card cover wasn’t as good as SOME of the high street insurers. QBE covers this and so does 1Cover. Some others I looked at don’t.

  • Excess.

My excess is $200 for most claims. It’s $100 at Southern Cross and 1Cover

Other Important Factors

Other factors that didn’t affect me, but could affect others.

  • Unaccompanied children.

Had I bought tickets for my children but they travelled separately from me, they would not be covered by the insurance.

  • Pre-existing conditions.

It’s rare for travel insurance policies to cover pre-existing medical conditions. My credit card policy doesn’t cover them. But I found when I called the helpline that I could pay extra to get cover for pre-existing conditions, extra baggage, or a trip that is over the 90 days. I called the helpline out of interest and found that if someone travelling with me had a pacemaker due to a heart condition it would cost between $50 and $150 extra. Southern Cross TravelCare automatically covers claims due to an Existing Condition of a Relevant Person, but only up to $2,500 per illness per person with a cap of $5,000 per journey. If that’s enough cover for you then it’s better than the credit card travel insurance. But I would be wary of travelling overseas with just $2,500 medical cover for a heart or other serious condition.

  • Skiing.

I noticed that my credit card policy covers me for skiing at “recognised commercial fields”. The QBE policy excludes all snow sports unless you pay an additional premium.

The summary of all this is that my ASB Gold Card travel insurance is adequate for my needs. I checked with one of the leading insurers and I would have paid $338 for comprehensive cover. That makes the $80 I paid this year for my credit card a real bargain.

But don’t, whatever you do, rely on your credit card travel insurance until you’ve read this:

I can’t stress enough that the wording of every bank’s policy is very different. So don’t assume because I was covered, you will be as well. My policy is with the ASB/Tower. Other banks offer policies with very different wordings. The ANZ Premium card cover, for example, which is underwritten by AIG, excludes business travel unless more than half of the prepaid travel expenses are paid for with your personal ANZ card. The same policy, however, covers people up to the age of 90, which is generous. And finally, while my card covers terrorism, some other credit card policies don’t.

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