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Credit card travel insurance vs standard travel insurance

Your credit card travel insurance might be (sort of) free, but it might not be enough for everyone.

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Richard Laycock
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    If you've got anything beyond a basic credit card, there's a chance you'll be getting overseas travel insurance included as a perk bundled into your annual fee. But how much coverage do you actually get compared to purchasing a standalone travel insurance policy?

    We've made it easy to compare what you're getting with your card to a host of policies. Compare using the tool below so see what you could be getting.

    What to consider with your credit card's travel insurance

    If you have a high-end credit card, there's a good chance that it includes complimentary travel insurance. But is it enough? Here are some key things to consider:

    • What do you need to do to activate the cover on your card?
    • What excess will you pay if you need to make a claim?
    • How much of your luggage and valuables are covered?
    • What is the maximum period you can travel for?
    • How much of your overseas medical expenses are covered?

    So is the included insurance included with your credit card good enough, or would you be better off buying a standalone policy? Let's take a closer look.

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    What can I learn on this page?

    How does credit card travel insurance work?

    Let’s start with an obvious point. While many providers tout their credit card travel insurance as “free” or “complimentary”, it’s typically only offered on premium cards (that happen to charge an annual fee, which can run up to hundreds of dollars). Paying that fee entitles you to a range of card benefits, including insurance, so you’re not really getting something for nothing.

    However, this so-called “free” insurance can still help you save money. You’d already be paying the fee for your credit card anyway, so it makes sense for you to make the most of all the included benefits.

    So, how does it work? In order for your insurance to kick in, you’ll need to satisfy certain terms and conditions. For example, you may need to pay for your departure ticket to activate cover, while other cards require you to exceed a minimum spend threshold (for example $500) of trip expenses on your card before that particular journey will be covered.

    Once cover has been activated, it works in more or less the same way as an ordinary travel insurance policy. There are a few important differences you need to be aware of though; we’ll get to those in a minute.

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    Credit card travel insurance vs standalone travel insurance: how do they compare?

    Is credit card insurance enough? And how does it stack up against the cover provided under a standalone travel insurance policy? Let’s compare the two across a range of important categories:

    FeaturesCredit card travel insuranceStandalone travel insurance
    Level of cover

    Credit card travel insurance policies provide a broad range of benefits, including cover for everything from overseas medical expenses to rental car insurance excess.

    In fact, credit cards typically cover most or even all of the same benefits as a standalone policy.However, benefit limits on credit card policies tend to be capped at a lower level. For example, while many standalone policies offer unlimited cover for overseas medical expenses, some credit cards restrict cover to as little as $500,000.

    The winner: Standalone travel insurance

    • Winner

    Apply

    Cost of cover

    Okay, so credit card travel insurance isn't technically free but it's still included as part of your card's annual fee.

    If you take a couple of trips a year, the card's annual fee may work out to be cheaper than the cost of buying standalone insurance for each trip, so it's possible to get value for money.On the other hand, buying a standalone policy requires you to dig into your pocket to fork out some extra cash. The cost of cover varies widely depending on the policy you choose and your trip particulars – as a guide, quotes generated by the finder.com.au travel insurance quote engine (on 17/11/17) for a 30-year-old taking a two-week trip to the USA ranged from $43.05 to $372.30.

    The winner: Credit card travel insurance

    • Winner

    Apply

    Trip duration

    Most single-trip standalone travel insurance policies allow you to cover journeys of up to 12 months.

    However, many credit card policies only cover trips up to a certain length, such as 31 days or 3 months, which may not be enough if you're planning an extended trip away.

    The winner: Standalone travel insurance

    • Winner

    Apply

    Terms and conditions to activate cover

    Once you purchase a standalone policy, cover for your trip kicks in straight away and there are no special hoops to jump through or criteria to meet.

    It's quick, simple and convenient.To be covered under your credit card, however, you'll need to activate the policy before you travel – for example, you may have to pay for your flights using your credit card or even notify your bank of your travel plans. It's far from convenient and there may be some confusion about whether you're covered or not.

    The winner: Standalone travel insurance

    • Winner

    Apply

    Flexibility

    With standalone travel insurance, there are several things you can do to tailor cover to your needs. You can vary your excess amount, choose from multiple levels of cover, and add additional cover for sports and adventure activities.

    You can't do any of that with credit card travel insurance, so it may not be the best choice if you need something other than "one size fits all" cover.

    The winner: Standalone travel insurance

    • Winner

    Apply

    Cover for pre-existing conditions

    Some credit card travel insurance policies won't automatically cover any pre-existing conditions, and they won't allow you to apply to get cover for your condition by paying an additional premium.

    As a general rule, standalone policies provide greater flexibility around the coverage of existing health problems.

    The winner: Standalone travel insurance

    • Winner

    Apply

    Cover for valuables

    Standalone policies allow policyholders larger limits and sub-limits on cover for valuable items.

    They also give you the option to purchase additional cover for high-value items like smartphones and cameras.
    Credit card insurance doesn't allow you to add cover for high-value items, while many policies specifically exclude items that have been lost, only covering damaged or stolen items.

    The winner: Standalone travel insurance

    • Winner

    Apply

    Cover for senior travellers

    Regardless of whether you choose standalone or credit card travel insurance, age limits apply. However, with a credit card policy, once you exceed the upper age limit you'll need to switch to a new card if you want cover.

    Meanwhile, some standalone insurance providers will cover travellers up to the age of 100 or even older, and it's a whole lot easier to shop around for a policy that meets your needs.

    The winner: Standalone travel insurance

    • Winner

    Apply

    Cover for people travelling with youStandalone travel insurance policies typically cover any dependants travelling with you, while you can also purchase a joint policy to provide protection for your spouse or travelling companion.

    Meanwhile, some credit card policies will only cover the cardholder and no-one else. While other cards may also cover the people travelling with you, you may need to spend a certain amount per person using your credit card in order to activate cover.

    The winner: Standalone travel insurance

    • Winner

    Apply

    Cover for cash

    Standalone policies generally only provide a low level of cover for the theft of cash from your person, usually around $100 or $200.

    Credit card policies offer much more, generally covering up to $500 of your hard-earned cash.

    The winner: Credit card travel insurance

    • Winner

    Apply

    Cover for worldwide travel

    When you buy standalone travel insurance you'll need to specify all the destinations you plan on travelling to and choose a policy that covers the appropriate regions.

    As a result, the destinations you visit affect the cost of cover.However, credit card travel insurance is not location-specific, so you can travel to a wide range of destinations around the world without it affecting your cover. Having said that, make sure you look closely at the overseas medical expense cover, as hospital stays can be very expensive in some parts of the world.

    The winner: Credit card travel insurance

    • Winner

    Apply

    Cover for domestic travel

    When you buy standalone cover, a wide range of insurers offer policies specifically designed for travel within Australia.

    But if you're relying on your credit card for protection, many policies will only cover international holidays and don't offer any cover for domestic trips.However, some platinum cards do offer domestic travel "inconvenience" insurance, which covers you for flight delays, missed connections and car rental excess.

    The winner: Standalone travel insurance

    • Winner

    Apply

    Excess payable when you claim

    Standalone travel insurance usually features a lower excess than credit card policies.

    Some card providers require you to pay an excess of up to $500 when you make a claim, while standalone policies tend to limit the excess to $100. You'll need to factor this into your calculations when working out whether the travel insurance on your credit card provides good value for money.

    The winner: Standalone travel insurance

    • Winner

    Apply

    American express stand alone vs credit card travel Insurance

    BenefitsAmerican Express ultimate travel insuranceAmerican express platinum card travel insurance
    Medical emergency expenses coverUnlimitedUnlimited
    CancellationUnlimited$30,000
    Loss of income cover$10,400$12,000
    Personal liability cover$5,000,000$3,000,000

    The verdict: So should I choose credit card travel insurance or standalone cover?

    Can you use your credit card travel insurance instead of buying a standalone policy? Yes.

    But should you? That really depends on the quality of the cover offered by your card.

    As you can see in the comparison above, standalone travel insurance outperforms card-based cover in a wide range of categories. If you want the highest level of cover with the greatest level of flexibility, it will usually be the best choice.

    However, that doesn’t mean you should dismiss credit card travel insurance outright, as it still provides a decent level of coverage and there are plenty of situations where it could potentially offer all the cover you need.

    If you’re healthy and you’re planning a standard short trip overseas, credit card travel insurance could provide sufficient protection. And if you take a couple of trips a year, comparing the cost of your card’s annual fee to buying standalone travel insurance for each trip should see you come out on top - financially, at least. But if you want to be sure that you'll be covered for a wider range of situations and to a higher level, standard travel insurance will be your best bet.

    Compare your travel insurance quotes

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    What’s covered by credit card travel insurance?

    The benefits offered by credit card travel insurance vary depending on the card you choose. However, you can generally expect cover for:

    • Overseas emergency medical and hospital expenses. This benefit ensures you (and your wallet) will be looked after should the worst happen. However, pre-existing conditions are typically not covered.
    • Luggage and personal belongings. If your luggage and/or personal items are lost, stolen or damaged while you’re travelling, credit card travel insurance will cover the cost of replacement or repair.
    • Cancellation fees and lost deposits. Sometimes unexpected events can force you to change or cancel your travel plans such as a relative falling ill or you losing your job. In these cases, your insurance will reimburse you for cancellation fees and any non-refundable deposits for pre-paid travel arrangements.
    • Resumption of journey. Cover is provided for travel and accommodation costs so that you can resume your journey after an unexpected event, for example the death of a relative.
    • Special events. If an unexpected travel delay means that you are unable to make it to a pre-arranged special event, for example a wedding, cover is available for the cost of alternative transport expenses to get you there on time.
    • Rental vehicle excess. This feature covers the rental vehicle insurance excess if your rental car is crashed, damaged or stolen.
    • Travel delay. If you’re unexpectedly delayed for more than six hours, such as if a computer system meltdown results in massive flight delays, cover is provided for meals and accommodation.
    • Accidental death and funeral expenses. Your family will receive a benefit if you die as a result of an injury you suffer while travelling.
    • Loss of income. This feature provides a regular benefit if you are injured during your trip and unable to return to work.
    • Legal liability. Credit card travel insurance policies will also cover you when you are deemed legally liable for causing injury or property damage to a third party.

    Find out which credit card providers offer complimentary travel insurance

    Things to be aware of with credit cards travel insurance

    If you’re thinking of relying on credit card travel insurance for your next overseas trip, keep an eye out for the following traps and pitfalls:

    • You’re not automatically covered just because you have the card. Remember, you’ll need to do whatever is required to activate cover, such as paying for a certain percentage of your trip expenses with your card.
    • You may also need to notify your bank of your travel plans. This is typically easy to do through your online banking, but make sure not to forget this vital step.
    • Some policies will only cover the cardholder. Check whether it’s also possible to cover family members travelling with you. If it is, how can you activate cover?
    • Higher excesses usually apply. You may need to pay an excess of up to $500 when you make a claim, which could limit the number of times you can receive a benefit from your policy.
    • Limited cover for pre-existing conditions. If you have a pre-existing medical condition, your insurance may not provide cover for any claims that arise due to that condition.
    • Age limits apply. Check the fine print to make sure you’re eligible for cover.
    • You may not be covered for adventure sports. Many policies exclude cover for adventure sports and activities, so think twice before participating in any of these pastimes while on holiday.
    • Trip duration limits apply. If you’re planning an extended trip of longer than three months, your credit card insurance may not provide any cover. Some policies will also only cover you if you have a return ticket, so check the PDS to make sure you’re protected.

    Tips for choosing credit cards that offer travel insurance

    If you’re looking for a credit card that provides travel insurance cover, the best thing you can do is shop around. The benefits, features, limits and exclusions of the cover offered can differ greatly from one card to the next, so it pays to examine each competing policy closely. Does it provide coverage for the events and incidents you want coverage for? Are the coverage limits adequate for your needs? What do you need to do to activate cover? Is there a minimum spend required?

    Asking yourself all of these questions will help you settle on the right card for you. It’s also a must to read product disclosure statements closely. While it may seem like a monotonous task, familiarising yourself with what is and isn’t covered is an absolute must. When you’re doing this, remember to examine the excess attached to each policy and whether you would have to pay this every time you make a claim.

    Of course, you’ll also need to factor in the other benefits each credit card offers. What is the rewards program like? What is the points earn rate? What other features can you take advantage of as a cardholder? How much is the annual fee? Take all these factors into consideration to help you make the right choice.

    Compare quotes for standalone travel insurance

    warning Finally, some good news! Domestic travel is picking up, so some insurers have started offering cover again 🦘
    Just remember, you won't be covered for any pandemic related claims if you do take out domestic travel insurance.
    International travel insurance is limited and sometimes unavailable at this point.

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    6 Responses

      Default Gravatar
      JillNovember 30, 2017

      I am 75. Credit card with NAB.Will I have cover?My card is platinum.

      Reply
        Avatarfinder Customer Care
        HaroldNovember 30, 2017Staff

        Hi Jill,

        Thanks for reaching out to Finder.

        Yes, cardholders aged 75 years and under can use NAB credit card complimentary travel insurance provided that you meet the other eligibility criteria stated from complete guide to NAB complimentary travel insurance.

        You can also review the relevant Product Disclosure Statements/Terms and Conditions of your policy for more details.

        Hope this helps.

        Kind Regards,
        Harold

        Reply
      Default Gravatar
      clarrieJune 19, 2015

      I am with anz and have a visa platinum which I get free travel insurance is that a good way to go

      Reply
        Avatarfinder Customer Care
        RichardJune 19, 2015Staff

        Hi Claire,

        Thanks for your question.

        It depends on what you are looking for out of your travel insurance policy and how comprehensive the ANZ policy are offering. The checklist under Credit Card vs Standalone Travel Insurance should help you weigh up the pros and cons.

        Please make sure to read the eligibility criteria, features, and details of the policy, as well as the relevant Product Disclosure Statement of the policy before making a decision and consider whether the product is right for you. If necessary, speak to the insurance brand to verify any details.

        I hope this was helpful,
        Richard

        Reply
      Default Gravatar
      JanJune 18, 2015

      You don’t list Westpac Earth Black American Express Cards.

      Reply
        Avatarfinder Customer Care
        RichardJune 18, 2015Staff

        Hi Jan,

        Thanks for your comment.

        You may visit this guide if you would like to know more about the Westpac Earth Black American Express Cards. If you would like to compare policies from the travel insurers in our panel, please enter your travel details into the travel insurance quote form.

        Please make sure to read the eligibility criteria, features, and details of the policy, as well as the relevant Product Disclosure Statement of the policy before making a decision and consider whether the product is right for you. If necessary, speak to the insurance brand to verify any details.

        All the best,
        Richard

        Reply
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