Credit Card Insurance
With travel insurance now available from a variety of different providers, it’s more important than ever that customers purchase adequate cover through a trusted provider.
In the pursuit of a bargain, many customers overlook the fact that not all travel insurance is created equal. When it comes to credit card travel insurance, can consumers be confident of the complimentary cover, or will they be left under-insured or without cover? We examine some of the most common misconceptions below.
Myth: “It’s cheaper and easier to go with the complimentary travel insurance on my credit card.”
Activation
Once you have the credit card, you don’t need to do anything else, right? Not necessarily. Many travellers are caught out when they don’t realise they are required to "activate" their cover. The criteria required for activation varies from provider to provider, but in most cases a certain amount of their trip must be pre-paid on their credit card.
Paying extra in credit card surcharges
Savvy travellers know that credit card payments may incur a surcharge, and choose to pay for their trip using alternative payment methods (debit card, BPAY). But to activate complimentary travel insurance, these methods no longer remain an option.
For example, let’s say a customer pays for a $10,000 overseas holiday on credit card to activate their cover. However, the payment incurs a 2% credit card payment fee. That’s an extra $200 paid in surcharges, to activate a complimentary policy which may or may not provide adequate cover.
Excess payments
It is important to check what excess payment is required when claiming, as a high excess with no buyout option can significantly increase the overall cost of travel insurance.
Myth: “Travel cover is premium quality simply because it is attached to a premium credit card.”
Without reading the full Product Disclosure Statement, travellers should never assume they will be fully covered. Every travel insurance offering varies in terms of cover, limitations and exclusions.
Flexibility
Travel insurance is not a case of "one size fits all" – and neither are your customers. Standalone cover often allows travellers to choose the level of cover they require, from a basic level through to a comprehensive level, instead of a standard level of cover across the board. Travellers participating in a sport or activity should also check whether this is covered – some policies exclude things like skiing or snowboarding.
Myth: “My credit card offers me travel insurance – so I’m already covered.”
Age restrictions
Like with any travel insurance product, travellers should always check for age restrictions that might exclude them from cover. Having a credit card that offers complimentary travel insurance does not necessarily mean automatic cover – and there’s nothing worse than discovering this when it’s time to claim and it’s too late.
Existing medical conditions
While on the subject of exclusions, travellers should also be sure to check whether a policy offers cover for their existing medical condition/s – and what restrictions apply. Assuming that complimentary travel insurance means full cover can leave them out of pocket if they need to claim.
Myth: "It’s all about price in the end."
Travel insurance extends far beyond simple cover. When travellers are overseas and need help, particularly in medical situations, being able to reach an expert here in Australia, 24 hours a day, can make a world of difference. Navigating language barriers, liaising with on-the-ground services and coordinating emergency transport, while keeping travellers and their families informed, is no easy task.
Chances are, travel insurance specialists are better equipped to help travellers get home safely. Similarly, once they’re back home, travel agents are equipped to help customers prepare and lodge claims for travel insurance purchased through their agency.
Myth: "I'm travelling with the secondary card holder on my card, so we're both covered."
While travel insurance offerings differ from provider to provider, travellers should never assume that their complimentary travel insurance automatically extends to secondary or additional card holders.
In some cases, credit card travel insurance will only cover the primary cardholder. In other cases, the complimentary insurance may be extended to secondary or additional cardholders - but cover they receive may be limited to fewer benefits. Another point to remember is that additional cardholders may also need to meet specific requirements around activation, age and pre-existing medical conditions.
So what's the moral of the story here? Never assume that cover is automatic without doing a bit of research first to be sure. It might take a little extra time but is worth it to avoid an unexpected (and costly) shock when it comes time to claim.
Written by SureSave and reposted here with their permission.
SureSave Pty Limited ABN 82 137 885 262 AR 339902 is an authorised representative of Cerberus Special Risks Pty Limited ABN 81 115 932 173, AFS Licence No. 308461. This is general advice and you should consider if this product suits your needs. Before you buy, please read the Product Disclosure Statement available from us. This insurance is underwritten by certain underwriters at Lloyd's.