05.Credit card vs standalone travel insurance
Many of the cards we reviewed provide similar quality protection to standalone travel insurance, especially if you want hassle-free cover for things like unlimited emergency medical, cancellation cover and good protection for baggage and items.
One area where credit card travel insurance falls down though is in the flexibility. For example, there are not as many options to customise your cover in terms of length of trip and reducing excess. However, free travel insurance is not based on location (unlike regular travel insurance), which means you can travel from Europe to the US (for example) without having to worry if your policy covers both areas.
Credit card travel insurance often (but not always, see below) doesn’t have age limits, which will be a benefit for some, but you need to call your insurer and pay a fee for any pre-existing conditions. There are the normal exclusions and weasel words, but this is found in both free and standalone travel insurance.
Both credit card travel insurance and standalone products insure for accidental loss. However, with the number of restrictions and exclusions, the actual cover provided is limited to specific circumstances. One of the biggest barriers is the exclusion of items that are left ‘unattended or in a public place’.
We’ve heard numerous reports from CHOICE members that have had bags stolen at the airport, or even taken while being loaded into a taxi, only to have a claim denied because of the ‘unattended in a public place’ rule. Even if you file a police report (a requirement when making a claim), the clause still applies.
It had us thinking, what type of accidental loss is covered? So, we asked insurers for some examples and were told the cover is provided for things like bags left inside taxis or for accidental breakages (e.g. dropping your camera). To avoid problems when making a claim, it’s worthwhile understanding the limits of cover, and don’t just rely on the headline promises in the PDS.
CHOICE member Alex recently planned a trip to Singapore with his wife. He successfully activated his cover when he purchased his ticketets with a NAB Platinum Visa Card, but prior to departure, his wife's elderly mother was unexpectedly injured. He had to cancel the trip to assist during her stay in hospital and recovery after discharge.
Unfortunately, his mother was also over the age of 80, which meant claiming any losses for the cancellation were out of the question. As you can see in our comparison table, not all cards have age restrictions, and Alex has expressed his disappointment to the NAB and Chubb, which is the insurance provider. Although the terms of the insurance are clearly stated in the PDS, it shows how easily restrictions and exclusions can void your cover.
Alex hopes his experience will serve as warning to others. It is imperative to check the terms and conditions, consider the cover and make sure it is suitable for your situation when consider any travel insurance product.