These days, many consumers forgo standalone travel insurance in favour of credit card travel insurance from major credit card providers like Commonwealth Bank, ANZ, Westpac, and NAB. It’s a convenient option, but before you make a choice, it pays to be informed.
One of the first things to note is that not all credit cards even offer insurance. It seems like a no-brainer, but many people with a credit card assume all credit cards have free travel insurance.
Another thing to remember is to activate your credit card travel insurance. To activate, many cards require you to use your card to book your flights - but different cards may have different activation methods, such as notifying the provider, or booking travel through a particular service. If you don’t activate your insurance properly, then you might end up with no coverage at all.
Additionally, not all cards automatically provide travel insurance, and those that do are generally premium cards that charge higher fees and greater excesses.
Most credit cards that offer travel insurance provide basic coverage that includes spouses and dependants travelling together, but typically there’s a cap on how long you can be away - which might not suit you if you’re going on an extended trip.
So, whether you opt for credit card insurance or use a stand-alone provider, read this helpful guide before you make a final decision.
| Credit Card Travel Insurance | Standalone Travel Insurance |
|---|---|
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Must often book travel through the card to qualify, or spend a minimum on pre booking. There might also be a requirement to book travel through affiliated agencies. |
Can be purchased after obtaining tickets, regardless of how travel was booked. |
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May need to be activated before coming into effect, or taking full effect.
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Would come into effect whenever you buy the policy, which means you’re often covered for cancellation costs before you leave. |
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Medical expenses may be capped, for example, at $500,000. |
Many policies offer unlimited coverage. |
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May firmly exclude many pre-existing conditions. |
Usually, you will be able to negotiate coverage for pre-existing conditions by paying a higher premium. Or you can get a policy that excludes your pre-existing condition. |
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Upper or lower age limits may apply. |
‘Age loading’ of premiums — increasing the price to cover the perceived higher risk of covering older people — makes it easier to tailor policies different generations. |
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Are often limited to a maximum time period, often three months, or even 30 days. |
Longer periods of travel are more easily catered for, as well as the possibility of extending coverage. |
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Usually comes with higher excess. |
Excess on claims can be as low as $100. |
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May exclude ‘extreme’ sports, or even activities as mainstream as skiing. |
Many high-risk activities will be included, depending on the insurer. |
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Often covers loss or theft of cash. |
Loss of cash is not generally covered under standalone policies. |
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Cost is free with credit card membership (in accordance with set conditions). |
Cost ranges from under $50 to up to $500, depending on your circumstances. |
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Claims process is often taken care of by a third party and not the insurance supplier. |
Claims process is generally taken care of by the supplier themselves. |
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May exclude ‘extreme’ sports, or even activities as mainstream as skiing. |
Many high-risk activities will be included, depending on the insurer. |
The best credit card travel insurance is the one you’re researching thoroughly before you go. The reason for that is everyone has different needs and circumstances. Some people are older travellers with pre-existing medical conditions, some people only want medical costs covered, some people are going on long-term travel for a few months or longer, and some people are going skiing or cruising.
Then there are others who are only travelling domestically and want a cheaper policy to match.
All of these circumstances - and more - will affect the type of travel insurance you get. In terms of credit card travel insurers, it’s best to research and pay close attention to the exclusions.
| To start you off, you can start by researching some of the well-known providers of credit card travel insurance |
|---|
| Australia Banks: Commonwealth Bank, ANZ, Westpac, NAB, Citibank |
| Australian Airlines: Qantas, Virgin Australia, Jetstar |
| New Zealand Banks: Bank of New Zealand, ANZ Bank New Zealand |
| New Zealand Airlines: Air New Zealand (stand-alone travel insurance) |
| Credit Card Providers: American Express Australia, American Express New Zealand |
Unlike many types of credit card travel insurance, stand-alone travel insurance can be purchased at any time before your trip. This often means that, in many situations, you’ll be covered for cancellation costs if you can’t go on your trip - all from the moment you get travel insurance.
On the flipside, because credit card travel insurance isn’t purchased, it might only come into effect when you book your flight, or take another action determined by your provider.
Flexibility and customisation is more difficult with credit card travel insurance, whereas stand-alone options provide up-front flexibility to customise policies for your specific purposes. That’s why many people who have unique circumstances prefer the transparency and flexibility of a standalone policy.
However, all travel insurance has degrees of coverage and exclusions, so no matter which option you go with, it’s important to make sure that you understand exactly what you are and what you’re not covered for.
Most credit card insurance is underwritten by major Australian insurers, and whether you've covered for Coronavirus related claims will depend on which insurer your credit card provider uses. You may be in luck depending on the credit card provider you've used, but you'll need to check their individual policies and cut-off dates.
The other things to keep in mind is that even if Coronavirus-related claims are covered. For example, you may have had to have booked a minimum amount of your trip on your card, or you might have had to have activated your travel insurance before it can be claimed against.
No, ‘free’ travel insurance is not offered on every card. It’s generally only offered on premium cards with higher annual fees.
No. Many credit card plans will only cover you when you’ve satisfied a requirement, like booking a part of your trip with the card. For many credit card travel insurance providers, the part of your journey that you need to book with your credit card are your incoming and outgoing flights. For others, it might be just a portion of your flights, or some of your accommodation, etc.
If you have several credit cards but pay for your tickets and other travel arrangements with one that doesn’t offer insurance, then you might not be covered.
This is another situation where it pays to check with your credit card insurance provider, as many do not cover open-ended or one-way trips.
Credit card travel insurance, correctly activated, always covers the primary cardholder, and sometimes (depending on how comprehensive the policy is) covers their spouse and dependent children as well.
However, family members generally need to travel with the primary cardholder for the duration of the trip, and usually their travel must have been partly or entirely purchased with the same card. Always check the criteria and see if your spouse or children need extra coverage.
If you’re a grandparent travelling with your grandchildren, you need to check that you have coverage for them, because different companies have their own take on what a “dependant” means.
It depends. Some credit card policies are activated at the start of travel — which almost always means the outgoing flight, while some must be activated online. Others come into effect automatically, but must be ‘registered’ online to take advantage of the full offer. Unfortunately, the fact that a lot of credit card coverage doesn’t cover you before you leave can mean being financially out of pocket if you need to cancel your trip.
It might be a lot harder to claim under credit card insurance, because the people who sell you the insurance aren’t the same people you claim through. The more complicated the claim, the more difficult it might be. Do your research and find out what people say about the claiming process with any travel insurance that you get.
Many stand-alone travel insurers have in-house sales and claim team, so the people you buy your travel insurance from are the very same people who'll help you if you need to claim. This is especially important if you want to speak to someone back home when you’re in trouble overseas.
In some circumstances, credit card insurance policies won't come into effect until you’ve actually started travelling. In other words, if a medical, personal, or geopolitical crisis stops you from taking that first flight, nothing will be covered. A standalone policy, on the other hand, will generally kick in the moment you buy it - often months before travel commences.
Whether you’re bungee jumping, heli-skiing, or scuba-diving, it’s probably best to check that your insurance (credit card or otherwise) covers ‘extreme’ activities, and that medical expenses are ‘unlimited’.
Many credit card insurers won’t cover injuries incurred during extreme sports, which could include white water rafting, skydiving, or bungee jumping, for example, but also skiing or snowboarding.
However, many specialist travel insurers will either cover you automatically, ro give you an option to select a Winter/Snow sports add-on to your policy.
Most credit cards with free travel insurance provide coverage for overseas trips only, so you need to check if there’s a domestic inclusion.
Mostly, yes. And it’s not just banks, but airlines as well. Insurers play off the brand of the bank or airline they’re providing insurance through, and they generally need to pay for this partnership.
However, the commissions and rates will vary, so it’s always best to check the PDS of any travel insurance that you’re considering.
It’s unlikely that any travel insurance provider will cover you if you choose to travel somewhere that’s known to be unsafe (e.g. it’s been reported in the mass media or the Australian government has issued a warning about it). The big difference is that an established, dedicated travel insurer will generally provide notice of the exclusion on their website, so at least you can make an informed decision before going to a particularly risky destination. If you’re using credit card insurance, this information may require a little more digging.
No. The policies on every card will differ, whether you’re choosing a Commonwealth Bank card, or a Westpac card. Some policies may seem ideal on the surface, but may exclude something you need (eg. cruising or skiing), or may differ on their approach to pre-existing medical circumstances.
Whenever you have complicated or unusual circumstances, your travel insurer is going to need to know about it so they can charge you the appropriate premiums.
For example, if you or your travel companions fall outside the prescribed age limits, or if you have pre-existing medical conditions, your insurer needs to know. The problem is, most people never have any direct contact with their credit card insurer. They tend to activate the insurance and that’s it.
Of course, it’s possible to contact the insurance provider for your credit card to negotiate expanded coverage, but ask many people, and they usually don’t know who is the end provider of their credit card travel insurance.
Essentially, if you rely on your ‘automatic’ coverage, and you have circumstances that are a little different, you might find out you’re not covered at all when something does go wrong.
The failure to declare pre-existing medical conditions is a very common reason people get their travel insurance claims denied. It’s very important to call your card’s insurance provider directly to ensure that nothing in your own circumstances will result in being denied coverage under their policy later.
It’s also important to note that some credit card travel insurance policies won't automatically cover any pre-existing conditions, and some companies won't allow you to apply to get cover for your condition by paying an additional premium.
Ideally, if you have a pre-existing condition, you’ll be able to negotiate coverage for an additional fee. Just make sure to get confirmation in writing of any such arrangement, visit your doctor to get official clearance for travel — with documentation — and keep records of all paperwork.
Remember that even if a condition has been treated with surgery or medication, and appears to be resolved, it still may be considered as a pre-existing medical conditions by insurers. If in doubt, check with your insurance provider.
Standalone travel insurance automatically covers many pre-existing medical conditions, and, for conditions that aren’t automatically covered, you may have the following options:
Or, you might not be able to get insurance at all, but at least you'll know about it up front.
Pregnant women are excluded from cover by some credit card insurers Even if you are able to negotiate some sort of coverage under a credit card policy, there may be restrictions on claims, higher excesses, and increases in premiums.
Many standalone travel insurers, can cover pregnant women through the second trimester, but it’s always essential to understand exactly how these provisions will apply to you personally. Restrictions generally apply. Childbirth or regular ante-natal care, for example, will always be at your expense. If you're worried about anything at all to do with your pregnancy and travel insurer, make sure you ask!
Generally speaking, if you have a disability it’s not compulsory to declare it to your insurer. However, there is no blanket rule so it’s really best to check if your disability is covered from the get-go.
If you're the cardholder traveling with a spouse or dependent child who has a disability, it’s also best to call and make sure that they will be covered under your card’s travel insurance. Do you have any particular equipment that will require coverage? Make sure your policy includes wheelchairs, hearing aids or other essential pieces of apparatus.
If you do decide to go with credit card travel insurance, here are a few tips so you can make the most of it.
Different cards may offer what seems like comprehensive travel insurance on the surface, but it might be another product altogether. These are the three types of insurance that you could be offered:
Some providers will offer travel accident insurance/travel inconvenience insurance on top of travel insurance, or they might just offer one of the three products. Make sure you understand exactly what you’re getting before you go overseas.
This is especially important if you’re going to countries like the US, where a short hospital stay could exceed the upper limits of your credit card policy.
If you’re considering applying for a new credit card specifically for its superior travel insurance offering, consider:
If you have any other questions or queries, please visit our Contact Us page.
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1Cover ® is a registered trademark of 1Cover Pty Ltd. 1Cover Pty Ltd ABN 91 105 954 265, is an authorised representative of Coffre-Fort Pty Limited ABN 66 125 358 518, AFS Licence No. 472457. Before you buy, please read the Product Disclosure Statement and Target Market Determination. Any information contained on this website is general advice only and has been prepared without taking into account your objectives, financial situation or needs. You should consider these having regard to the Product Disclosure Statement (‘PDS’). Before you purchase, please note in particular, the eligibility criteria, travel warnings in place and limitations to claim under multiple policy sections.
This insurance is underwritten by HDI Global Specialty SE – Australia.
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