Insurers sell different policy options, such as comprehensive or budget cover. Some premium credit cards also come with built-in travel insurance. So which should you choose?

Comprehensive vs budget travel insurance

Most insurers offer comprehensive and budget travel insurance. Comprehensive policies are more expensive, but they have higher cover limits and provide cover in circumstances where budget policies don’t. Here’s how one insurer’s comprehensive policy compares with its basic policy.

Benefits Maximum cover limit: Comprehensive Maximum cover limit: Budget
Your health if you’re injured or fall sick
Medical expenses Unlimited $25,0000
Dental expenses $3000 Nil
Funeral expenses $25,000 Nil
Your belongings if they’re lost, stolen or damaged
Luggage – total $25,000 $2500
Luggage – per item $1500 $500
Electronic equipment (e.g. cameras) $2500 $500
Your bookings if you have to cancel or change your trip
Loss of deposit (e.g. non-refundable flights) Unlimited $5000
Additional expenses (e.g. if you need to return home) Unlimited $5000
Missed connections $15,000 $500
Your liability if you accidentally cause damage
Personal liability $2.5 million $500,000
Rental vehicle excess $6000 Nil

If you can only afford a budget policy, make sure it covers medical expenses and personal liability (in case you accidentally injure someone or damage something).

Single- vs multi-trip travel insurance

Most travellers heading overseas will be well served by a single-trip policy. But if you’ve got multiple trips planned in the year ahead, you may save money with a multi-trip policy. These provide cover for unlimited trips within a 12-month period. Drawbacks? Each trip is restricted to a maximum period – for instance, 60 days.

Credit card travel insurance

Some premium credit cards (think gold or platinum) have built-in travel insurance. Credit card travel insurance has similar benefits and limitations to comprehensive policies. There are additional fish-hooks to watch for:

  • You must activate credit card travel insurance before departing. Each provider has different activation requirements. You may need to use your card to pay for your flights or a percentage of your trip’s expenses. You won’t be covered if you don’t meet these requirements.
  • Your card’s insurance only covers your trip up to a maximum length – for example, 40 days. If your trip exceeds this, you won’t be covered.
  • Credit card insurance policies tend to exclude pre-existing medical conditions by default – unlike some comprehensive policies, which list automatically covered conditions.
  • You may have to pay a higher excess when making a claim. Where most other policies have an excess of $100, credit card policies often have a fixed excess of $200 or more.