Travel insurance is an essential safeguard when embarking on overseas or domestic adventures. When planning your travels it’s important to understand the primary differences between complimentary credit card travel insurance offered by the banking sector and standalone policy providers.
For simplicity, we are going to limit our comparative analysis to The Big Four banks; Commonwealth Bank (CommBank), Westpac, National Australia Bank (NAB), and ANZ and the options offered by household names like Cover-More and NIB.
While complimentary travel covers have similar features, benefits and limitations, the coverage offered by standalone policy providers vary significantly in cost, and claims processes. Here’s a detailed comparison to help you decide which option best suits your needs.
Credit Card Travel Insurance: The Convenience Option
Credit card travel insurance is often included as a complimentary benefit when using certain premium cards to pay for travel expenses. While this type of insurance is convenient and cost-effective, there are limitations to consider
Advantages of Credit Card Travel Insurance
- Cost: No additional fee beyond the credit card’s annual fee.
- Ease of Access: Automatically activated when the card is used for eligible purchases.
- Basic Coverage: Generally includes medical expenses, trip cancellations, and some personal liability.
Limitations of Credit Card Travel Insurance
- Restricted Coverage: Often has lower coverage limits for medical expenses and exclusions for pre-existing conditions.
- Activation Requirements: Coverage may only apply if a minimum spend threshold is met, typically a portion of your travel expenses.
- Claiming Process: Can be more complicated, involving third-party underwriters rather than direct communication with the credit card provider.
- Lack of Customization: No options to tailor the policy to your specific needs or trip type.
Key Differences at a Glance
| Feature | Credit Card Insurance | Cover-More/NIB Insurance |
| Cost | Complimentary with card fee | Varies based on coverage and trip |
| Coverage Limits | Lower limits, exclusions common | High limits, customizable options |
| Activation | Must meet spending requirements | Begins on policy purchase |
| Pre-existing Conditions | Often excluded | Can be included for a fee |
| Claims Process | Indirect, through underwriters | Direct with insurer |
| Add-ons | Not available | Adventure sports, cruises, etc. |
Credit card insurance is a good fit for short, straightforward trips without significant risks or specialized requirements.
Comprehensive & Customisable Travel Insurance
Covermore and NIB are two of Australia’s leading standalone travel insurance providers, offering robust and flexible policies. These insurers are designed to provide peace of mind for a wide range of travel scenarios.
Advantages of Standalone Travel Insurance
- Comprehensive Coverage: Policies often include higher limits for medical expenses, emergency evacuations, trip cancellations, and lost belongings.
- Customizable Options: Add-ons are available for adventure sports, cruise travel, or high-value items.
- Pre-existing Conditions: Typically allow the inclusion of pre-existing medical conditions, subject to an additional premium or medical assessment.
- Dedicated Support: Direct access to claims support and emergency assistance, simplifying the process.
Limitations
- Cost: Premiums can be higher than credit card insurance, especially for extended or high-risk trips.
- Upfront Payment: Requires a one-time fee that varies based on the coverage level and duration.
For those traveling extensively, engaging in high-risk activities, or seeking peace of mind, standalone policies provide unmatched flexibility and security.
What Is Covered by Credit Card Travel Insurance?
Overseas Emergency Medical Assistance and Expenses
Most Big Four banks include coverage for medical emergencies abroad, including hospital stays, surgery, and medical evacuations. Example: CommBank’s complimentary travel insurance covers emergency medical expenses up to unlimited amounts for eligible cardholders.
Trip Cancellations and Interruptions
Reimbursement for prepaid travel costs if trips are canceled or interrupted due to covered reasons, such as illness or natural disasters. NAB, for example, provides coverage for trip cancellations if prepaid costs exceed $500 and are paid with an eligible NAB credit card.
Luggage and Personal Belongings
Protection for lost, stolen, or damaged luggage and personal effects. Westpac includes coverage for lost or stolen personal items, though sub-limits apply for specific items like laptops or jewelry.
Rental Vehicle Excess
Coverage for the excess payable in the event of damage to or theft of a rental car. ANZ offers this benefit as part of its Platinum and Black credit card travel insurance.
What Is Not Covered by Credit Card Travel Insurance?
Pre-existing Medical Conditions
Most Big Four banks exclude coverage for pre-existing conditions unless explicitly declared and accepted. Example: NAB does not cover claims arising from pre-existing conditions unless approved in advance.
Age Restrictions
Some policies have age limits or reduced benefits for older travelers. CommBank, for instance, has restrictions for travelers aged 80 or older, requiring additional premiums for coverage.
High-Risk Activities
Activities like scuba diving, skiing, or motorcycling beyond certain engine capacities may not be covered. Westpac excludes certain adventure sports unless additional coverage is purchased.
Pandemics and Epidemics
Coverage for pandemic-related events, such as COVID-19, is limited or excluded. CommBank covers emergency medical expenses for COVID-19 but excludes most non-medical claims.
Alcohol and Drug-Related Incidents
Claims arising from incidents under the influence of alcohol or drugs are typically excluded. This exclusion is standard across all Big Four banks.
Activation Requirements for Complimentary Travel Insurance
Each of the Big Four banks requires specific activation steps to validate coverage:
- CommBank: Spend at least $500 in a single transaction on prepaid travel costs with an eligible credit card and activate the policy via NetBank or the CommBank app.
- Westpac: Pay a set portion of your travel costs (typically $500 or more) using an eligible Westpac credit card.
- NAB: Use your NAB credit card to pay for at least $500 of your prepaid travel costs and have a return ticket booked before departure.
- ANZ: Spend a specified amount on travel costs using an ANZ Platinum or Black credit card to automatically activate coverage.
Key Considerations
| Feature | CommBank | Westpac | NAB | ANZ |
| Cost | Included with annual card fee | Included with annual card fee | Included with annual card fee | Included with annual card fee |
| Pre-existing Conditions | Excluded unless approved | Excluded unless approved | Excluded unless approved | Excluded unless approved |
| High-Risk Activities | Not covered unless additional coverage is purchased | Not covered unless additional coverage is purchased | Not covered unless additional coverage is purchased | Not covered unless additional coverage is purchased |
| Claim Process | Via insurer (Cover-More) | Via insurer (Allianz) | Via insurer (QBE) | Via insurer (Allianz) |
Is Complimentary Credit Card Travel Insurance Enough?
- When It’s Sufficient: Suitable for short trips with minimal risks, where travelers are within the eligibility criteria and don’t require coverage for pre-existing conditions or high-risk activities.
- When You May Need Additional Coverage: If you’re planning an extended trip, engaging in adventure sports, or need coverage for pre-existing conditions, consider a standalone policy from providers like Cover-More or NIB.
Making the Right Choice
The decision between credit card travel insurance and a standalone policy comes down to your individual needs and the nature of your trip.
- Opt for Credit Card Insurance if you’re traveling on a budget, taking a short trip, or have minimal risk exposure.
- Choose Cover-More or NIB if you’re planning an extended trip, have unique requirements, or prefer a stress-free claims process with superior coverage.
By evaluating the specifics of each option, you can ensure you’re adequately protected, allowing you to focus on enjoying your journey. Always read the Product Disclosure Statement (PDS) to understand policy terms and ensure it aligns with your travel plans.
