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|
|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|
|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.