Understanding your credit card’s complimentary travel insurance

Jul 12, 2020

This post contains references to products from one or more of our advertisers. We may receive compensation when you click on links to those products. For an explanation of our Advertising Policy, visit this page.

A feature of some of the best U.K. credit cards is that they include complimentary travel insurance, which is great for avid travellers. You should not travel abroad without some form of travel insurance. Even if you hold standalone comprehensive travel insurance, you may be wondering if the travel insurance provided with your credit card can replace it. After all, it’s complimentary — well, part of the annual fee of your card if there is one.

So, what should you consider before relying on the insurance that comes along with your credit card? Let’s take a look.

New to The Points Guy? Sign-up for our daily newsletter and check out our beginner’s guide.

Understand what is covered and what is not

The short answer is: Don’t assume every single item, situation or expense will be covered by a card’s travel insurance, or that every policy will be the same regardless of the credit — or charge — card. The terms and conditions of your credit card’s travel insurance may be long and complicated, but it’s a sound investment to spend the time reading and understanding them. The coverage and conditions may be different from what you are used to from another insurance policy. Indeed, the terms and conditions of the travel insurance offered by American Express U.K. differs from card to card. This information should be provided with your welcome pack when you receive your new card and will also be available on the card issuer’s website. Ensure you have the terms and conditions for the insurance for the exact card you hold.

Related: The ultimate guide to travel insurance

Car hire may be covered, or it may not. You may be covered for lost baggage only, or it may also include delayed baggage. Valuable personal electronics like laptops or mobile phones may need to be registered separately in order to be covered.

Don’t make assumptions about your coverage without understanding the fine print first. Included in that, also know whether or not the issuer of your credit card requires you to enrol in the benefit beforehand.

I purchased a ticket to a music festival in France last year as well as the associated flights, transfers and accommodation. The festival was unexpectedly cancelled a few weeks prior to beginning. While I was refunded the festival ticket price by the event organisers, I was out of pocket for the other associated expenses. I made a claim on my travel insurance, assuming that the cancellation of an event beyond my control would be covered. But I hadn’t read the terms and conditions of the policy carefully enough and my claim was rejected because the circumstance was not covered.

Hikers with snowshoes in Switzerland. (Photo by deimagine/Getty Images)
(Photo by deimagine/Getty Images)

Coronavirus

It’s understandable to be nervous about travelling during a pandemic, and travel insurance is extra important where there is a heightened chance your travel could be disrupted or you may become sick.

At the time of writing, the U.K. Government has issued a global “Do Not Travel” warning for some destinations. If you choose to travel while this government warning is in place to the destinations part of the ban, it will void your travel insurance. It is never advisable to travel without travel insurance in place, and this is even more important during a pandemic. (It’s worth noting that there are now 67 destinations that the U.K. FCO deems that it’s safe to travel to. You can find the full list here.)

Related: Complete guide to travelling during the deadly coronavirus outbreak

If you want to make a claim for travel cancelled because of coronavirus, each insurance provider including those offered complimentary with a credit card will have a special coronavirus FAQ page advising what is and is not covered. For example, for travel insurance issued by American Express, you will be covered if you choose not to travel where there is a government warning in place for the date and destination of your travel, provided you booked before the warning was in place. You must have booked the travel on the card and have a policy including cancellation cover. You would not be covered if, for example, you booked the travel while the government advice was not to travel, even if the ban was lifted by the time of your trip but you opted to cancel anyway.

Note that if an airline cancels your flight, you are entitled to a refund from the airline, or if you choose not to travel, generous travel waiver policies may in place with your airline. This is likely to be a far easier and quicker process than lodging a travel insurance claim if you do not travel because of coronavirus. Your travel insurance provider may even insist that you exhaust all avenues with your travel provider before it will consider any claims made under the policy.

Check if it only covers purchases made on the card

Issuers like American Express will only cover certain purchases and events under the included travel insurance if the initial purchases were made using the card.

For example, under the terms and conditions of the American Express insurance for The Platinum Card from American Express covering Cancelling, Postponing and Abandoning Your Trip, the transport and/or accommodation must have been purchased using either the American Express card or Membership Rewards points. Some travel insurance benefits provided by American Express are subject to enrollment.

What makes this frustrating is that credit cards in the U.K. impose foreign transaction fees (usually around 2.99%), meaning that if you are booking a trip in another country and making local purchases there (such as for accommodation), you need to use the credit card and face the foreign transaction fee in case you need to make a claim under the travel insurance.

Related: Great news: Virgin Atlantic credit cards axe European foreign transaction fees

(Photo by John Gribben/The Points Guy)

Be aware of limits

Medical expenses abroad can be very expensive, depending on your location. The United States, for example, is notorious for huge medical bills. Because of this, you’ll want to make sure you are covered for out-of-pocket expenses.

Limits will vary depending on the type of insurance and type of claim. For example, the travel insurance provided by the British Airways Premium Plus Card has a limit of £250,000 for loss of life, limb, sight, speech or hearing while travelling on a public vehicle where the ticket was purchased with the card. This means eligible claims can cover up to this limit, but will not cover amounts beyond this limit, regardless of how much cost you have incurred because of the incident.

Just as you should be aware of the limits of your insurance, you should also be aware of any excess amounts payable. This means there may be an amount the person claiming under the insurance would need to pay before the insurance provider will pay anything additional. The excess for this BA Amex travel insurance is £50 per claim.

If you are uncomfortable with either the limits or the excess of any card’s travel insurance, you may wish to consider purchasing additional insurance (with higher limits or lower excess). Note that most insurance policies strictly prohibit any claims where you have already claimed the event or item under another insurance policy — you can’t be compensated twice even if you hold two insurance policies.

The Chase Sapphire Reserve card includes travel protections such as emergency medical and dental benefit. (Photo by Musketeer/Getty Images)
(Photo by Musketeer/Getty Images)

Check who is covered

You may assume everyone travelling with you is covered by your travel insurance. But always be aware of exactly who is covered — this may be different depending on whether you are travelling with your family or with friends.

(Photo by fstop123/Getty Images)
(Photo by fstop123/Getty Images)

Be aware of exclusions

If you’ve ever read an insurance policy, you may have seen a long list of exclusions. These are certain conditions, events or individual circumstances that will not be covered by the insurance. For example, if you have a pre-existing medical condition before you took the insurance policy, that insurer may exclude paying for any medical cover.

You will need to sign a declaration when submitting the claim that you are not aware of things that may be excluded such as pre-existing medical conditions.

Dangerous activities, such a motorbike riding without a licence, or off-piste ski sports may also be excluded under your policy.

Bottom line

TPG U.K. always recommends using travel insurance. Whether you decide to go with a third-party to supply your travel insurance or rely on the insurance provided as a benefit with one of your credit cards, it’s worth researching the exact policy and what is covered. At the end of the day, you don’t want to be left out of money by thinking you’re covered when, in reality, you’re not. Being able to travel with the comfort of knowing you’re covered in any instance makes travel insurance worth it.

Featured image by Away on Facebook

Editorial Disclaimer: Opinions expressed here are the author’s alone, not those of any bank, credit card issuer, airlines or hotel chain, and have not been reviewed, approved or otherwise endorsed by any of these entities.

Disclaimer: The responses below are not provided or commissioned by the bank advertiser. Responses have not been reviewed, approved or otherwise endorsed by the bank advertiser. It is not the bank advertiser’s responsibility to ensure all posts and/or questions are answered.