Choosing Credit Card Travel Insurance

Choosing Credit Card Travel InsuranceMany credit cards offer complimentary overseas travel insurance as an included value-added benefit. But not all credit card travel insurance was created equal. So, what should you look for in a credit card travel insurance policy?

Unfortunately, there is no one-size-fits-all insurance policy. Before choosing any insurance policy, it’s important to carefully read the PDS to determine if the policy suits your individual needs. For example, a policy that covers snow sports may not be suitable if you’re going on a cruise in the Caribbean.

You need to read what each policy covers as it is different and match to your trip needs. A policy may be really good, but may not cover something you need.

Many credit card travel insurance policies provide only basic cover. So, even if your credit card does come with complimentary travel insurance, it can still make sense to purchase separate insurance in some cases.

I’d caution very strongly to examine all of the exclusions that come with policies offered in conjunction with credit cards.

If you do decide to use credit card travel insurance, beware that you often need to purchase a minimum amount of trip expenses using the card. Some credit card providers require that you purchase the flights by card. Others specify a minimum spend amount. Some banks also require you to activate the cover ahead of travel – meaning you’re not automatically insured. There can be substantial differences in these requirements, so this is a key feature to consider when comparing options.

Look for policies that just need a small amount per person spent in advance on the trip i.e. on airfares, cruises, airline taxes, accommodation etc. For example ANZ require $250, Westpac $500, Bank West $500 (BW also has no foreign currency conversion fees on purchases) etc.

You should also consider whether award flight bookings are covered by your credit card’s insurance policy. Some – but not all – insurers won’t cover flights booked using frequent flyer points.

One of the reasons so many credit cards offer complimentary insurance is that they’re able to buy the policies in bulk at a large discount. Generally, these are basic policies issued by third-party insurers.

All that the banks do is buy a standard policy in bulk from an insurance company with no brokers, travel agents or online aggregators in between. When they buy a say half a million policies and only a minority travel in any one year, the discounts are huge.

Join the discussion on the Australian Frequent Flyer forum: Best Credit card Travel insurance


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Matt Graham
The editor of Australian Frequent Flyer, Matt's passion for travel has taken him to over 60 countries… with the help of frequent flyer points, of course!
Matt's favourite destinations (so far) are Germany, Brazil, New Zealand & Kazakhstan. His interests include economics, aviation & foreign languages, and he has a soft spot for good food and red wine.

You can contact Matt at [email protected]