Travel insurance from my credit card provider, is it sufficient?

Did you know that in 2013, it was reported that over 200,000 travel insurance claims were paid out to Australians? That’s a lot of claims, and a lot of smart travellers.

Yet many travellers still only rely on complimentary travel insurance provided by their credit card company, rather than looking into separate insurance options. This is also sometimes known as pre-existing travel insurance.

If you’re considering travelling overseas with only your credit card travel insurance to cover you, you should ask yourself– What am I really covered for? How easy will it be to make a claim? And is this something I can really trust?

Do All Credit Cards Provide Travel Insurance?

No. Only some credit cards will provide complimentary travel insurance. These are often higher-end cards like platinum or gold/black cards that have high annual fees.

To be eligible for these credit cards, you usually have to earn a specific income (e.g. over $75K for the ANZ Black Frequent Flyer Card) and have a good credit rating.  

What Cover Will My Creditor Provide?

Travel insurance via a credit card will often have a very basic or restricted level of cover and may only apply:

  • When you book all or most of your travel flights, accommodation, tours and other elements on that same credit card – if you don’t, you won’t be covered  
  • To the credit card holder – in some cases this can extend to a spouse or child; if it does not, you may have to spend a minimum amount on the credit card for each traveller before they can be eligible for travel insurance  
  • Up to certain dollar limits that may or may not be suitable for your specific trip 
  • Under specific or basic emergencies; if you try to make a claim on something that is not an emergency, you may not be eligible to receive help or reimbursements  
  • If you use a licensed Australian travel agent to book your holiday – if you do not, you will void your cover, according to

Some credit cards may also only cover you with basic medical cover, but no other benefits such as cancellations, delays, hospital expenses, baggage, valuables, kidnappings or medical evacuations.

Consider this case study from Smartraveller:

 “Sean found a great deal online for a trip to Bali, Indonesia, and paid for the flight with his credit card. Sean’s credit card also offered complimentary travel insurance, so he assumed he was automatically covered because he had used his credit card for the ticket.

Unfortunately, when Sean landed in Bali, a taxi driver drove off with his suitcase and surfboard already loaded into the van.

Sean submitted a claim for lost luggage, but because he hadn’t exceeded the minimum required pre-departure spending on his credit card, he wasn’t insured at all. He lost more than $2000 as a result.”


What Restrictions or Limits Will My Cover Involve?

This will be dependent on your specific provider, but you should check items such as:

  • Monetary limits – you may only be covered up to a certain amount for a specific item or claim (e.g. $500 for medical) 
  • Duration of your trip – some cards will only cover you for a certain amount of time  
  • Activities & sports – many credit cards will not offer cover for basic activities and sports, so double check these as well  
  • High excesses – or amounts you need to pay before your claim will be paid (e.g. $500)

What If I Have a Pre-existing Medical Condition?

In many cases, pre-existing medical conditions can make you exempt from many credit card travel insurance claims and benefits. You will need to check with your creditor.

If they do not cover your pre-existing condition, you may need to pay an upgrade fee. Alternatively, you can contact a travel insurance agency who will consider your situation and offer you more competitive cover and premiums.

What If I Want to Customise My Cover?

This feature usually isn’t available when utilising credit card travel insurance. In most cases, it’s a ‘one policy fits all’ approach.   

Why Should I Consider Stand-Alone Travel Insurance?

Stand-alone insurance from a dedicated travel insurance provider can often provide you with more cover than what you would get through a credit card organisation.

  • If your holiday is fairly low risk, it can be easy to find cheap travel insurance with more cover than what’s offered through your credit card  
  • If your holiday is higher risk, you should look into stand-alone travel insurance packages to ensure you are adequately covered for your trip  
  • Remember that booking flights, accommodation and other travel expenses on your credit card to become eligible for travel insurance can often involve high credit card surcharge fees, so consider whether you might be better off spending this money purchasing stand-alone insurance instead   

Stand-alone travel insurance can also offer other benefits such as:

  • 24/7 Emergency Assistance
  • More comprehensive levels of cover to choose from
  • Ability to customise your cover to suit your specific trip and activities
  • Ability to extend your cover if you decide to travel for longer
  • Higher limits (e.g. covered to $50,000 instead of $5,000)
  • Consideration of pre-existing medical conditions
  • No need to spend money using a particular card to be eligible

Always read the fine print on any insurance policy you are interested in before purchasing.


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