New research reveals a comprehensive coverage knowledge gap with 39 per cent of Australians relying on the travel insurance incorporated with their credit card to cover them when travelling overseas, despite the lack of personalised or full coverage.
The Money.com.au survey also found one-quarter (25%) of Aussies say credit card travel insurance doesn’t provide adequate coverage and 15 per cent don’t even know if they have coverage.
Almost half of Millennials (45%) were most likely to trust the travel insurance on their credit card, followed by 42 per cent of Gen X and 34 per cent of Baby Boomers. Gen Z were the least likely to trust their card’s travel cover at just 28 per cent.
Credit card travel insurance cover can be suitable for generic protection for medical emergencies, trip cancellations, lost baggage and travel delays.
But as one-size-fits-all, it doesn’t tailor the cover if the inclusions don’t suit your client’s trip.
A standalone policy is generally more suitable if you need higher claim limits for long or expensive trips, have pre-existing medical conditions or plan to do adventure sports.
It’s a key opportunity for travel advisors to share the benefits of comprehensive travel insurance to cover mishaps and emergencies while travelling and take the guesswork out of tailored coverage for clients.
One size doesn’t fit all
Money.com.au’s finance expert Sean Callery said credit card travel insurance can be good value, but travellers need to understand the benefits and limitations.
“Many travellers don’t realise that the travel insurance bundled with their credit card can offer very similar inclusions and claim limits to standalone policies as they’re often underwritten by the same major insurers. For some, it can represent good value, since the cover comes at no extra cost beyond the annual card fee,” he said.
“But because the cover is standardised for all cardholders, it may not suit every trip. It’s also worth noting that cover only kicks in if you book your trip using the credit card, so it’s important to check the eligibility requirements before relying on it.”
