Choosing travel insurance is an important part of the travel planning process; not having the right type of coverage, or essentially not choosing the right company to go with, can result in negative consequences in the future. Of course, we’d like to think that nothing will ever go wrong on our big holiday, but the truth is that it can. In fact, thousands of Australian holidaymakers are exposing themselves to unnecessary risk by relying on travel insurance coverage offered through their credit cards.
Some premium credit cards offer complimentary travel insurance as a benefit to their holders, and it can typically be a defining factor when choosing a credit card company. However, on further review, the travel insurance cover provided in these circumstances may not be sufficient for most travelers.
There can be some major limitations specifically when considering pre-existing medical conditions, individual coverage and length of coverage.
Credit Card Travel Insurance: Things to look out for
With travel insurance a necessity for business or leisure travel, it is best to research the following policy limitations commonly associated with travel insurance issued by credit card companies:
- Purchasing requirements. Does a specified amount of the holiday need to be paid for on the credit card to activate the policy?
- No coverage for pre-existing medical conditions, such as asthma or diabetes. Some credit card policies refuse to cover any pre-existing conditions while others require holidaymakers to prepare a special application for additional coverage, and pay a surcharge if approved.
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- Conditions on claims while traveling. For instance, one major credit card requires holidaymakers needing emergency medical assistance while traveling to produce a copy of their credit card statement showing their return airfare payments before they can gain approval for support.
- Limits on length of coverage. Most credit card providers have a strict 90 day coverage limit for any one trip and will not allow policyholders to extend their coverage while they are traveling.
- No cover for business travel. This includes coverage for items used for any business purpose.
- Strict limits on sporting activity. Holidaymakers may not be covered for such activities as boating, white water rafting or winter sports.
- Restricted or no coverage for cancellation. Some people may find the need to cancel their plans if their leave has been canceled by the employer, or if they are made redundant.
- Family coverage. Some credit card travel insurance will only cover the card holder.
- Higher excess. While most insurers place a $100 excess against their claims, some credit card companies apply an excess of $200.
In addition to this list, many credit card providers reserve the right to change their terms and conditions. While this may not appear of importance when you receive revised T&C’s, it could actually affect your travel insurance. A notification of change may be buried in the surrounding credit card information update and not immediately seem clear or relevant.
Travel Insurance: What you need to know
Every traveler is different, but there are still a number of key points each should look into when purchasing travel insurance. Always check with the provider whether you are covered appropriately for:
- Medical expenses and evacuation
- Laptops and business equipment
- Personal Liability
- Rental Car excess
- Loss of Income
- Resumption of journey
If you require one of the following types of cover included in your travel insurance ensure you pay particular attention to the finer print: pre-existing medical conditions, pregnancy, dependents, sporting situations, or adventure activities. Always review the Product Disclosure Statement/policy wording and match against your travel insurance requirements. It is best to find the cover which suits your requirements rather than traveling with inadequate insurance.