If you’re planning to travel anytime soon, you might want to ask yourself if that free travel insurance that comes with your credit card, will really covered if something goes wrong.
Or to put it another way, how does it compare with the traditional policies arranged by brokers?
Needless to say, there are good and bad. Dig deep enough and you might find that only travel expenses paid with your card are covered. Some cards offer only limited cover. The problem is, you probably won’t find out until you have a claim.
A couple of recent examples come to mind. A US hospital bill for $80,000 for a five-day stay is still ‘in discussion’. The lost value of frequent flyer points used for an international upgrade – not covered.
Many of the policies for travel insurance available in travel agencies or on the Internet, do not cover cash, or if they do, they cover only a small amount. The policies associated with credit cards have often a higher coverage, ranging from $500 per person to about $1000 for a entire family. Will you be carrying more than loose change?
How much is your luggage worth including your personal effects? How much is it insured for? How much death cover is included? Is it limited to what’s known as ‘Transit Accident cover’?
Does your policy exclude pre-existing medical conditions? If so, have you supplied a clearance letter from the doctor and had it accepted by the insurer.
Like most insurance policies, there are loopholes and ‘escape clauses’ with many of the free travel insurance that’s comes with credit cards.
At the end of the day, it still makes sense to avail yourself of the free travel insurance with your credit card. You’ll just have to read the fine print and make sure you’re adequately covered.
Travel insurance looks easy, until you have a claim. The best way to be certain you are covered is to check with a broker.