What does credit card travel insurance cover? 10 things you need to know

Free travel insurance? How does that happen? It's one of a package of perks that comes with certain credit cards. It's not free in the sense that it usually applies only to those cards with a relatively high annual fee, often those with "Platinum" of "Diamond" somewhere in their name. But if you travel frequently, complimentary travel insurance is one of a basket of goodies that make your travels easier and cheaper – and those perks just might make it worth your while signing up.

Among other advantages, the travel insurance that comes with credit cards is convenient. You don't have to shop around. As long as you're compliant with the conditions, and broadly speaking that means paying for your travel using your credit card, the travel insurance kicks in as soon as you make your booking. No need to spend time working your way through the terms and conditions of various standalone policies.

While you'll generally be covered for most things – loss or damage to your property, personal liability, medical and hospital expenses and trip cancellation due to unforeseen circumstances – at about the same level as you would with most standalone policies,  be aware: there are differences.

Check you've got it

Not all cards offer complimentary travel insurance, especially those with no annual fee. Some airline-affiliated cards do, and so do those that come with generous points-per-dollar.

Do you qualify?

To take advantage of the free travel insurance that comes with many elite level credit cards, a traveller must charge either all or a portion of their travels above a specified amount to the card. There might also be a minimum spend. For example with eligible Westpac credit cards you must spend at least $A500 on the card on prepaid travel costs.

Do you need to activate the insurance?

In most cases the travel insurance policy is activated automatically when you book and pay for your travel using the card but some, such as CommBank's credit card customers, need to activate coverage online.

Who's covered?

As well as the primary cardholder, most complimentary credit card travel insurance covers spouse and dependent children provided they meet the requirements – ie their travels were also paid to the required level using the eligible credit card, and as long as you're all travelling together for the duration of the trip. Family members usually includes legally dependent children including stepchildren or legally adopted children up to 22 years of age and who are wholly dependent on the cardholder for financial support. Some cards require that dependent children under 18 must live with the primary cardholder in order for cover to apply.

Pre-existing medical conditions

Most credit card travel insurance policies specifically exclude any claim arising from a pre-existing medical condition. That includes late-term pregnancy, diabetes, high blood pressure, asthma and psychological and psychiatric conditions among others.

Age limit

Most credit card travel insurance has an age limit of 80 years. Hence its popularity with older travellers who often have real problems getting coverage at a price they're prepared to pay. It's not carte blanche however. Those over 65 might face some restrictions.

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Who am I insured with?

The credit card provider will have a contract with an insurance underwriter. They're the ones that set the terms and conditions. As far as your credit card provider is concerned it's an arm's-length relationship and any concerns, claims or disputes should be referred to the underwriter.

When does the insurance end?

Usually on the date you return home, and that's one of the ways that you might be disadvantaged with this complimentary cover. If you need medical treatment after you return home for an illness or infection caught during your travels, a retail travel insurance policy will often cover you for several months after you return home.

Medical cover

Cover for medical is comparable with most standalone travel insurance policies. One that's different is the cover provided to American Express Platinum Edge cardholders. Under the terms and conditions, the policy document states "We will not pay medical costs over $1500 without prior authorisation by CHUBB Assistance." That could be problematic if anything happens that requires urgent medical treatment.

Is there a maximum trip length?

This varies but it's often generous – up to six months. If you were to pay for a six-month travel insurance policy, that cost alone would cover your annual membership fees for many elite level cards.

See also: Common travel insurance traps: What you need to know

See also: Why travellers shouldn't fall for 'cash passport' money cards

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