YouAsked: Should I get credit card insurance or stand-alone travel insurance?

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  5. YouAsked: Should I get credit card insurance or stand-alone travel insurance?
YouAsked is a segment on our blog where we answer questions you’ve asked us. If you have any questions regarding hiking, hiking equipment, our packages and locations, or anything else, don’t hesitate to drop us a line at info@adventureabroad.com.au

We got a email asking if we recommended applying for standard insurance, or if credit card insurance would suffice. We thought it would be a great topic to cover on our little blog!

At Adventure Abroad, we put safety first in everything we do. But there are just times when sh** happens!  That’s why we always make sure to offer travel insurance to each of our guests. Not only is it a legal requirement, but it can also help defray the costs of helicopter rescues and expensive medical bills. That said, we’ve had travelers who declined regular travel insurance in favor of the complimentary travel insurance that comes with their credit card.  

So, what is complimentary travel insurance anyway? Complimentary travel insurance refers to the insurance policy that is sometimes included as part of having gold or platinum credit cards.  The travel insurance may be an additional feature of your high-end credit card, but it doesn’t mean it’s absolutely free. Technically, it comes at the cost of the card, which charges interest and an annual fee.  Additionally, most credit card travel insurance can only be activated after you meet specific spend requirements.

On the surface, it requires no additional payment to have it available and there’s no application required to avail of coverage, giving traveling cardholders convenience and assurance. It has its merits but it isn’t perfect.  There are a number of things you have to look out for and understand thoroughly before you take the plunge!

Pre-existing medical conditions
As a whole, most credit card travel insurance don’t take pre-existing medical conditions into consideration. If you have one and it causes a financial liability during the trip, you’re not going to be able to file for a claim for reimbursement of medical expenses or any other costs.  

Stand-alone travel insurance has a list of pre-existing medical conditions that are approved for cover or would require an additional premium for coverage. All you would need to do is contact your insurance provider and let them know about it beforehand!

Length of medical coverage
Most credit card travel insurances have limited time frames for coverage, with dates set by the company. The coverage can range from 31 days to 3-6 months maximum.  This might not be enough should you travel for longer periods or multiple times in a year. Just an extension of 1 day outside your coverage dates, and you forfeit all protection afforded by the insurance. Yikes!

In this sense, stand-alone travel insurance tends to be a better option because you can personally set down the dates of your departure and return, even when you’re just applying for an insurance quote.  Plus, there are insurance plans that offer coverage for multiple trips in a year or coverage on an annual basis.

Medical coverage
Credit card travel insurance matches well what stand-alone travel insurance covers.  However, the main difference is in the amount they will reimburse. Card insurance tends to be capped at a lower amount, say $500,000 for medical expenses while regular insurance may be unlimited for certain medical expenses.  

$500,000 is certainly a large sum of money and may seem enough to cover any unforeseen medical emergency. But if you factor an expensive rescue operation, damage to property and high hospital bills, the amount can be easily eclipsed by increasing expenses.  

Flexibility
Credit card travel insurance is more of a one size fits all package.  It can be viable for near, short, single trips that don’t involve many risks or expose travelers to many hazards.  

Stand-alone travel insurance can be tailored to suit your budget and specific travel needs.  You can choose between multiple levels of cover, add insured, get additional cover for extreme sports and adventure activities.

Cost of cover
Often, annual credit card fees are higher than the minimum charge for basic travel insurance plans.  You are also required to charge all travel expenses, such as plane tickets, to the card for the coverage to be in effect.  This is a must to activate the insurance, and remember that these cards have high interest rates! The interest rates will continue to apply for the remainder of the balance due.

On the other hand,stand-alone travel insurance is a one-time payment without any interest rates. You can, however, charge your travel insurance to your credit card!

Our final verdict?  Stand-alone travel insurance is the insurance that we recommend our guests to avail of, for the ability to completely customize it according to your needs to ensure that you are completely covered.
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