Credit card travel insurance vs stand-alone travel insurance

There's a new type of travel insurance that has made a big splash - credit card travel insurance. And it's very tempting because it usually comes free with your gold or premium credit card! Note that standard credit cards don't usually include travel insurance as part of the features.

Before relying on any travel insurance it's important to make sure the travel insurance cover is right for your trip. So here's a quick look at what's included (and not included) in credit card travel insurance and how it compares to stand-alone travel insurance:

Credit Card travel insurance Stand-alone travel insurance
Family cover Your spouse and dependent children are automatically covered. Yes. But you'll have to purchase a couple's or a family policy
Sport cover Activities like skiing and bungee jumping are deemed as an "extreme sport" and are not covered. Sport cover is available at an extra premium.
Medical cover Some credit cards have medical caps of $500,000. You choose the level of cover from basic to unlimited medical cover.
Time limits Usually around 3 months of consecutive travel and cannot be extended. From 2 days up to 18 months.
Eligibility Across the board pre-existing medical conditions are not covered and there are age limits of around 74.
To activate the travel insurance you'll generally have to spend between $500-$1000 on prepaid transportation on your credit card.
If you have pre-existing medical conditions you'll have to pay a higher premium. And many stand-alone travel insurance policies have age loading fees depending on your age.
Cost Free with your credit card Depends on the age of traveller(s), destination and length of trip. From $40 - $400.

5 top credit card travel insurance tips!

1. The fine print says NO!? Give your provider a buzz: Most credit card travel insurance policies don't cover pre-existing medical conditions (asthma, diabetes) and have age restrictions of around 74. Be upfront with your insurance provider, and they may cover you if you pay a higher excess or take out extras cover.

2. Check the medical cover limit: Credit card travel insurance policies always include medical cover to some extent. The real question is how much? If you're travelling to America, Japan or Europe you'll want unlimited medical cover, because daily hospital bills can be around $10,000. Read the fine print of your credit card travel insurance policy and if it only covers $500,000 you should look at purchasing stand-alone travel insurance.

3. Make sure you're covered before you head off: There have been horror stories of travellers finding themselves in sticky situations and only then realising that they were not eligible for their credit card travel insurance. Many credit card travel insurances will require you to purchase at least $500 of the pre-paid travel expenses on the credit card in order to be covered.

4. Going on a long trip? Take a look at multi travel insurance: Credit card travel insurance policies have an expiry date of around 3 months. Even a day over and you won't be covered. So only use credit card travel insurance cover if you're holidaying for a short period. For longer trips, look at getting a multi/annual travel insurance policy, which will cover you for multiple trips over a year or 365 days straight.

5. Raging daredevils...get yourself some "extreme sport" cover: Adrenaline seekers should probably NOT rely on credit card travel insurance, because many credit card travel insurance policies specifically state that they won't cover any "extreme sports," especially snow sports and sky diving/ bungee jumping. Look for stand-alone "extreme sport" or "snow cover" to suit your hair raising activities!

The final word: If you're looking for standard travel insurance cover your credit card travel insurance policy should do the trick. But if you're stuffing your backpack for a year full of bungee jumping or travelling to countries like America where medical costs can be as high as $10,000 a day you should consider getting a personalised stand-alone travel insurance policy.

Making a claim: what you need to know before boarding the plane

It’s great that you’ve gone to the effort of insuring yourself and your belonging in the event that some misadventure happens during your holiday but unfortunately a number of people who buy travel insurance do find that when they go to make a claim it gets rejected. So whether you are using your credit card’s free insurance or you’re buying a standalone policy here are our top tips for ensuring a successful claim.

#1. File a police report

Official documentation is needed by insurance companies to process claims. This means that if you had something stolen or you lost your purse you will need to file a police report or report with the resort security office or equivalent. This report should include information of the where, when and what was lost or stolen and the value of the goods.

#2. Know your policy’s exclusions

Whether you have credit card travel insurance or a stand alone policy every insurance policy will have a list of exclusions. It is important that you know what these are before you board the plane or decide to try paragliding while in Fiji. In many instances you can get extra cover for sports by paying an extra premium.

#3 Is that destination listed on your policy?

One of the best things about travelling is being spontaneous but before you decide a day trip from San Diego to Tijuana South of the Border is a good idea, make sure that your policy will include cover for Mexico. The same goes for stopover destinations, even if you are only going to be in Singapore for a day on your way to Europe make sure your policy includes cover for this.

#4. Keep copies of all receipts

If you’re making a claim for lost or stolen belongings you’re also going to have to prove you owned them. Be sure to keep copies of all receipts. It’s also a good idea to photograph items in your suitcase (as well as your travel documents) then email them to yourself so that you have proof of ownership should you need.

#5. Review the excess

Even if you are using free credit card insurance if you need to make a claim you’ll need to pay an excess. With stand alone insurance the higher your excess the cheaper your insurance will be. Just make sure that the excess you’re required to pay will make claiming worthwhile. No point having to pay a $500 excess if the camera you had stolen was only worth $400.

#6 Existing conditions.

If you have any kind of pre-existing condition it is very important to be upfront about it. Many credit card policies will not include any cover for preexisting conditions. Stand alone policies do allow you to pay an extra premium to be covered for some conditions and it’s usually very affordable compared with the alternative of having to foot the bills yourself.

#7 Submit your claim in a timely manner

Many insurance providers require you to make a claim within 30 days of returning to Australia. Call your provider if you can’t get your evidence together in the time required. You might be able to submit the initial claim but then get an extension on the time required for other documentation.