How Does Credit Card Travel Insurance Work? - NerdWallet Australia (2024)

Travelling is a normal part of life for many Australians. As an adventurous nation, the annual overseas trip is a familiar ritual for many. Travel insurance is essential for international travellers to protect the journey and prevent unexpected financial costs. From accidents and emergency medical care to missed flights, lost baggage and coverage for belongings, credit cards with travel insurance may help safeguard your next adventure.

What is credit card travel insurance?

Travel insurance is available through online providers, travel agents, insurance brokers, other insurers (private health, home and car), and even credit card companies. Most banks, including the Big Four and smaller institutions, offer complimentary travel insurance with some types of credit cards.

Whether you’re travelling with expensive camera gear, have a pre-existing condition or have little ones in tow, using a credit card overseas that comes with travel insurance can offer the peace of mind that you’re covered if anything goes wrong. Although Australia has a strong public health system, the government doesn’t protect you while overseas. So, travellers are responsible for hospital bills and return flight costs if injured or sick.

Many travel credit cards include international travel insurance. Some banks also offer paid coverage for those with more extensive needs. Before choosing a policy, you’re best to check what is covered, any limits, excesses, and exclusions, and then discuss any pre-existing conditions. With the right insurance, you and your family could have coverage for unlimited overseas emergency medical assistance, cancellations, travel delays, and lost luggage and personal belongings.

Banks provide policies from partner insurers (similar to how banks have partner airlines for frequent flyer programs). For example, NAB’s travel insurance provider is Allianz, whereas ING partners with Auto & General.

If you don’t have a credit card with travel insurance, you may be able to purchase a policy from your bank. For example, CommBank has a handful of credit cards with complimentary international travel insurance for cardholders, their spouse and accompanying children. It also offers standalone policies that customers can buy independently.

Types of credit card travel insurance

Credit cards come with various protections, including international travel insurance, overseas transit accident insurance, interstate flight inconvenience insurance and rental vehicle excess insurance.

Keep in mind the most common insurable events:

• flight cancellations and delays
• missing a connecting flight
• medical treatments and emergency care
• lost, damaged or stolen luggage/personal items
• trip cancellation before departure.

It’s essential to do your due diligence because every bank and insurer will differ in coverage. If you’re applying for a credit card to access complimentary travel insurance, make sure you check what’s covered (and how much) before submitting an application.

For instance, Westpac offers certain cardholders access to these four insurance types. If you hold an Altitude Platinum card, you’re eligible for up to three months of international travel insurance, overseas transit accident insurance to cover injuries or death, rental vehicle excess insurance up to $5,500 and interstate flight inconvenience insurance for cancellations and delays. There are, however, caveats — such as purchasing the tickets on your credit card or prepaying $500 off your travel costs to your eligible card.

It’s helpful to check the definitions of the primary travel insurance policies to see which ones apply to you. In most instances, a broad international travel insurance policy suffices. For example, the CommBank travel insurance covers rental vehicle insurance, so a separate policy might not be necessary.

Getting free travel insurance with a credit card

Most banks offer complimentary travel insurance with select credit cards. Start your research with the Big Four banks.

Is there a catch with credit card travel insurance?

Getting a credit card with complimentary travel insurance can save you hundreds on your next overseas trip. The partner insurers are well-known names with comprehensive coverage. Just be aware of the potential temptations of holding a credit card, especially if you’re trying to build your credit score, pay off debt or prefer to travel with your savings.

Credit cards with travel benefits, like insurance or airport lounge access, are some of the best in the category, so long as you’re confident using one.

» MORE: What is consumer credit insurance?