The lead up to a holiday is an exciting time, particularly when you’re heading somewhere particularly new and exotic. There’s so much to consider– what to do, where to , accommodation to book so it’s all too easy to let a detail like travel insurance fall by the wayside.
The last thing you may feel like doing is getting bogged down in the nitty gritty of travel insurance. It’s a well documented fact that very few travellers truly understand all the ins and outs of their policies. It also comes as no surprise that a quarter of travellers won’t take out a policy until two days before they leave! Say what!
But travel insurance needn’t be so much of a hassle. You might even be covered already as part of your credit card deal. So what is credit card travel insurance, and is it worth looking into?
Hold your horses! Credit card travel insurance may be 'free' but only ‘free’ in the sense that you don’t have to pay extra for it. Most policies are only provided with ‘top end’ cards, which will most likely come with a higher annual fee than a standard credit card.
Wrong! (Well not necessarily). Never assume that your card provides you with free cover as standard. Always check and never just assume you are automatically covered. Imagine the horror of discovering you’ll have to pay for those ludicrously high medical bills as you didn’t have travel insurance after all!
Even if you do have a card with cover included, you’re more than likely going to have to jump through a few hoops to activate it. Activating your cover usually involves paying a certain percentage of your holiday with the card and ensuring sure that you exceed the minimum spend necessary. You may begin to feel like a performing sea-lion, but at least your ‘free’ policy will be activated!
So you’ve got a credit card and you’ve turned all the tricks you need to activate the insurance, so are you really getting the cover you anticipated? Let’s take a look at those pros and cons of credit card insurance:
Credit card cover will (usually) provide cover wherever you . Usually there are no additional costs for different regions, so you don’t have to pay extra depending on your destination.
Just like any other purchase it pays to shop around to find yourself a good deal. Lucky for you there are heaps of handy comparison tools to help you make your decision that little bit easier. The benefits, features, limits and exclusions will differ greatly from one card to the next, so it’s wise to pay close attention to the small print and check you’re buying adequate cover.
Questions to ask yourself include:
Once you have a good idea of the circumstances that may affect your cover you can then use that information to decide what type of cover is right for you. Of course, you may want to factor in any exciting card benefits like reward loyalty schemes and frequent flyer points.
Kiwibank offer complementary cover underwritten by Tower with their MasterCard Gold or Air New Zealand Airpoints Platinum MasterCard. You must be a Kiwi resident, under 80 years of age.
Westpac Hotspots Platinum card provide complimentary cover underwritten by AIG which includes you cover for 35 day trips, minimum spends and family member restrictions apply.
BNZ Gold or Platinum Visa cardholders get cover underwritten by Cigna for return (leisure only) international trips. You must pay at least $250-$500 on the card to activate. You can choose from 35 days or 90 days policies.
ANZ Airports Visa Platinum offers cover underwritten by AIG when you pay for at least half of your pre-paid travel expenses with your card.
ASB’s Visa Platinum with Rewards offer cover underwritten by Tower for 120 days when you pay for at least 50% of your holiday using the card.
American Express Platinum Edge offer complimentary domestic and international cover underwritten by ACE.
In summary, the term ‘free’ does not necessarily mean ‘free’. Credit cards that provide ‘complimentary’ travel insurance typically have annual fees ranging anywhere from $50 to over $500.
Having said that, if you’re a healthy, savvy traveller who takes more than two standard short trips a year, credit card travel insurance could be the winning ticket. When you compare the card’s annual fee cost with the price of standalone cover, it may well be more cost effective to choose credit card insurance. However, be mindful of the fact that in doing so, you may lose out on some important benefits and risk exposure to certain exclusions.
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