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You are here : Credit Cards vs. Travel Insurance

Credit Cards vs. Travel Insurance

Many people wish to book using credit cards as they believe this will give them insurance cover in the event of something going wrong. Credit cards actually give very little protection which is why travel companies of all sizes recommend, or even make comprehensive travel insurance obligatory as a condition of travel.

Before going on vacation or a tour of any nature it is vitally important to make sure that you have comprehensive travel insurance. It doesn’t matter where you are travelling to or for how long, taking out adequate medical and personal liability insurance cover is a necessity.

If you are unlucky enough to fall ill or have an accident whilst abroad it could cost you a great deal of money if you do not have proper insurance. Many people still take the risk of going on holiday without travel insurance, which could potentially result in financial ruin if they require medical treatment during the vacation.

Repatriation in an emergency to your home country could cost thousands of dollars, so it is essential to ensure that you have appropriate travel insurance for your trip. Credit card insurance may only cover the purchaser/card holder and not other members of the group travelling. Therefore your family or group will not be covered.

Credit card travel insurance tends to be very basic, and is often called “Travel Accident” cover. This means that you are not covered before you travel or when you arrive at your destination, but are only covered whilst actually travelling.

Cover relating to cancellation, missed departure, travel delay and your possessions is not normally insured, making credit card travel insurance totally unsuitable for most travelers. If you book your vacation with a credit card, you may sometimes be covered, but mostly, your basic credit card coverage will be limited to limited baggage insurance, flight accident insurance, and rental car insurance. Credit card travel insurance may also give you some basic aspects such as baggage delay or damage and hotel burglary. You are not normally covered in case of medical expenses, tour cancellation, delays, robbery, etc. If these aspects are covered the level of cover is usually very low and therefore insufficient.

Credit card insurance is very unlikely to cover you for any activities such as trekking at altitude, rafting, mountain biking, canoeing, skiing etc.

Please see the following article “The difference between “free” credit card travel insurance and a standalone travel insurance policy.

http://www.kanetix.ca/ic_travel_info_travel_articles_10

Another very useful page is below. This was written largely with Australians in mind but the same points apply to travelers of all countries.

http://www.moneymanager.com.au/planning/guides/insure_travel_guide.html