Credit card travel insurance

Credit card travel insurance

We’ve looked at the complimentary travel cover offered by 6 credit cards – 5 platinum and 1 gold – to find out what you get if you need to make a claim. We also asked the insurers how much it would cost to add extra cover for common holiday hiccups.

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The last thing you want to hear when an accident or illness scuppers your overseas trip is the credit card travel insurance you were relying on hasn’t got you covered.

Two Kiwis destined for Noumea thought they could depend on their card’s complimentary insurance when they had to cancel their holiday after a family member died. What they didn’t realise was the policy excluded claims arising from any pre-existing health condition – whether it was the cardholder’s or a family member’s.

The couple complained to the Insurance and Financial Services Ombudsman (IFSO) when the insurer declined their claim but were unsuccessful. The IFSO found the insurer was free to decline cover as the family member had been diagnosed with the illness before their trip.

Length of cover

Of the 6 cards, American Express Platinum Edge and Westpac’s Platinum Mastercard provide insurance cover for journeys up to 35 days in length, and Kiwibank’s Gold card up to 40 days.

ANZ’s, ASB's and BNZ’s Platinum credit cards all offer 90 days.

If you’re an ANZ, BNZ or Westpac cardholder and your trip itinerary exceeds their limits, you won’t be covered for any of it, no matter if misfortune strikes on your first day abroad.

For a price, you can extend the length of cover with most cards. The exception is American Express: no extensions are available.

The cost of extending cover for your trip can vary widely depending on the card. We asked the banks what they’d charge if someone on a European holiday wanted to extend their cover by 5 days. Kiwibank quoted $83.28 while ANZ* estimated $228.05. American Express and Westpac offer alternate credit cards with longer complimentary travel insurance periods, but these come with significantly higher fees.

Medical history

None of cards come with insurance that covers pre-existing conditions. So if a complication of a pre-diagnosed disease or injury occurs on your overseas trip, you’ll have to pay for the costs of treatment yourself.

Many travel insurance policies define pre-existing conditions to include any illness or impairment, so it’s best to contact your insurer and tell it anything you think may be relevant.

To get cover for a pre-diagnosed condition, you’ll probably have to pay extra. How much will depend on the specific condition as well as the card.

When we asked for estimates for a fictional customer with a history of breast cancer, Kiwibank quoted $50, and ANZ*, BNZ and Westpac quoted $100.

American Express Platinum Edge cardholders don’t have the option of adding cover. The insurance that comes with the card doesn’t cover pre-existing medical conditions at all.

Excluded activities

Even if the plan is to spend your whole trip on a sun-lounger, you’ll need to familiarise yourself with the activities your insurance won’t cover.

Some excluded activities are pretty standard – the 6 policies we looked at either exclude or put restrictions on cover for hang-gliding and scuba diving.

However, only Westpac Platinum Mastercard customers will need to avoid their resort’s archery range on top of this, and American Express cardholders won’t be covered if they play rugby or go trekking.

It’s better news for skiers. We contacted the insurance providers to see if cardholders would need to pay a premium to hit the ski fields. Only Westpac required an extra payment ($81.53).

Meeting the requirements

To take advantage of the insurance cover that comes with a credit card, you need to meet the provider’s requirements for activating cover.

All 5 platinum cards we looked at require you to hold a return flight before you’ll get any cover. Kiwibank’s Gold Mastercard only requires you to intend on returning to New Zealand.

Most cards also require cardholders to charge between 50 and 100% of travel costs to the card. Westpac sets specified dollar amounts depending on your destination, while BNZ cardholders are covered for trips charged to the card and paid for by any other method.

ANZ’s insurance has set time limits for when its cover activates. It won’t kick in more than six months before departure, even if you book your entire trip before that date.

If you need to make a claim, pay-outs can vary significantly depending on the provider. The maximum pay-out for a missed connection ranged from just $400 for an American Express Platinum Edge cardholder to $10,000 for ANZ and ASB Platinum customers.

ANZ, ASB, BNZ and Westpac offer unlimited medical expenses, while American Express caps these at $2.5 million. Kiwibank’s limits depend on the country you’re visiting.

Cardholders will pay an excess of between $200 and $250 on the most common types of claims – be sure to review your policy for these before you fly.

The complimentary cover provided by credit cards tends to be less generous than that offered by stand-alone travel policies provided by insurers such as Southern Cross or 1Cover.

The latter can have higher pay-out limits than cards, so if you’re concerned your card won’t cover you sufficiently in an emergency, you may want to consider a stand-alone policy.

Credit card vs stand-alone policies

We compared the 6 credit card-provided travel insurance policies with 2 of the most popular stand-alone policies.

 Annual credit card feeUnderwriterMaximum overseas medical & evacuation expensesMaximum missed connectionMaximum lost luggage & personal effectsMaximum lost cashMaximum personal liabilityAge limitMaximum holiday length (unless premium paid)
Credit card policies
American Express Platinum Edge$149.00Chubb Insurance$2.5 million$400$10,000A$750B$1 million74 and under (limited benefits for 75 years and over offered unless a mature age premium paid)35 days (no extensions)
ANZ Airpoints Platinum Visa$150.00AllianzUnlimited$20,000$40,000A$1000B$5m74 and under (unless mature age assessment completed and premium paid)90 days
ASB Visa Platinum Rewards$80.00CignaUnlimited$10,000$40,000A$4000B$5m75 and under (unless mature age assessment completed and premium paid)90 days
BNZ Advantage Visa Platinum$145.00CignaUnlimited$2,000$20,000No$2.5 million per person74 and under (limited benefits for 75 to 90 years offered if mature age assessment completed)90 days
Kiwibank Mastercard Gold$80.00TowerAustralia, South Pacific, Bali $200,000; USA, Canada, Europe, Japan unlimited; rest of the world $400,000$2,500Australia, South Pacific, Bali $20,000; rest of the world $40,000$2,500$2 million79 and under40 days
Westpac Airpoints Platinum Mastercard$145.00AIGUnlimited$3,000$20,000A$1000B$2.5 million74 and under (limited benefits for 75 years and over offered unless a mature age premium paid)35 days
Stand-alone policies
1Cover Comprehensiven/aLloyd's of LondonUnlimited$2,000$30,000$250C$5 million79 and under (over 80 must complete pre-existing conditions form)n/a
Southern Cross TravelCaren/aSouthern CrossUnlimited$30,000$50,000$500$1 million80 and under (for personal accident cover, all other benefits apply)n/a

GUIDE TO THE TABLE All information based on a family travelling together unless stated and based on August 2017 estimates. Acombined with total for lost cash. Bcombined with total for lost luggage & personal effects. Ctheft from person only.

Common traps

When something goes wrong when you’re far from home, it’s easy to forget to follow the instructions of your policy to the letter. However, this risks your insurer refusing your claims. Here are our tips:

  • Take pictures of your packed suitcases – particularly your valuables. Many insurers require proof of ownership when they’re asked to replace lost or stolen items. Receipts will also suffice.

  • If airport rules allow, pack your valuables in your hand luggage.

  • Keep your insurance emergency contact number on you, rather than back at the hotel or in your checked luggage. Make sure your family members know where you’ve stored that information.

If something goes wrong:

  • In a medical emergency, contact your insurers as soon as you can. Some policies ask you to contact them even before you call the emergency services or head to hospital, and say they can refuse your claim if you do not. For example, American Express’ policy documents says it won’t pay more than $1500 in medical expenses without prior authorisation.
    While in a serious situation you’ll always want to call emergency services first, make sure a call to your insurer is your second priority. If you're in a bind, you can ask to reverse the charges.

  • Even for non-emergency situations, such as minor injury or theft, call the claims line within 24 hours and ask what you need to do. For example, if something has been stolen, you may have to fill in a police report within a certain timeframe. If you need to cancel your trip for health reasons, you may need a doctor to confirm this in writing.

  • Ensure you keep a copy of any applicable police reports, in the case of theft or a car accident, and doctor’s notes, even for small medical issues.

  • Keep receipts from accommodation, transport, replacement luggage and meal charges you plan to claim for.

  • Be completely honest when filing a claim. If caught in a small white lie, the insurer could refuse to pay out. Insurers commonly ask if you’ve ever had a claim refused, which could affect your ability to get other forms of insurance in future.

  • All insurers must belong to a disputes resolution scheme. If you have a complaint that you can’t resolve with your insurer, you can go to the dispute scheme.

* In December 2017, ANZ's credit card travel insurance switched its policy underwriter to Allianz.

By Olivia Wannan
Investigative Writer