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Jetting off into the sun
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Credit Card Travel Insurance - Holiday From Hell?
By Becca Talbot
becca.talbot@consumerchoices.co.uk
Whether you’re honeymooning in the Maldives, sunbathing in the Costa del Sol, or skiing in the Swiss Alps, could relying on your credit card travel insurance leave you unprepared for a holiday mishap?
Credit cards offering “free” travel insurance are big news at the moment. With the outlook for Britain’s summer looking gloomy, everyone is contemplating where to jet off to, how to get there and how to knock a couple of quid off the price of their week in the sun. Credit card companies are jumping on the bandwagon, and many now offer travel insurance packages to their customers.
Our guide looks at the different insurance policies that are offered by leading credit cards, and weighs up whether it’s worth taking out additional cover before you pack your bags.
On average, a third of you British holidaymakers will pay for your summer holidays using your credit cards, and with about 75 per cent of card providers now offering some form of travel insurance, many of you will qualify for travel cover without realising it. In fact, you may even be paying twice for insurance cover. But with different cards offering different levels of cover, it’s important to make sure you get the right package for you.
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Am I covered?
While the vast majority of cards offer some sort of travel insurance package, whether it be accident insurance or total cover, it is worth comparing the different cards to ensure you get the right policy for you.
Credit card travel insurance tends to be very basic, and is often called “Travel Accident” cover. This means that cover does not apply to the traveller before they travel or when they arrive at their destination, it covers them literally while they're travelling.
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"...a third of British holidaymakers will pay for summer holidays using credit cards..."
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Therefore cover relating to cancellation, travel delay, missed departure and possessions are not insured, making credit card travel insurance unsuitable for some travellers.
The American Express Platinum Card offers a travel insurance package that covers personal accident, loss of luggage and travel delay claims, as well as insurance on medical costs or if you’re unlucky enough to have your trip cancelled.
Some premier credit cards charge an annual fee in exchange for a range of services such as shopping discounts, as well as offering travel insurance to cardholders and their families. Fees on such accounts can be as high as £300 a year, whereas annual family worldwide travel insurance starts from around £70. It’s best to work out whether the benefits on offer justify their cost.
What are the cards offering?
The table below shows what the credit card travel insurance covers and how much you can claim:
|
What you're covered for, and how much you can claim |
| Card |
Cancellations |
Personal accident |
Medical expenses |
Lost or damaged items |
Delays |
Anything else you should know |
| Amex Platinum Card |
Up to £7,500 |
£50,000 |
Up to £2,000,000 |
Up to £2,000 |
£150 per person |
All policy terms apply to the cardholders’ children under the age of 25, so children on gap years are covered |
| Egg Card |
nil |
Up to £50,000 |
nil |
nil |
nil |
You’re covered even if you haven’t used your Egg Card to pay for your travel |
| Capital One Cashback Card |
£12,500 |
£350,000 for accidental death |
£50 a day if you’re hospitalised |
£350 if luggage fails to reach your destination after 4 hours of arrival, £2,500 if it still hasn’t arrived after 48 hours |
£500 |
You can also claim up to £500 for missed departures caused by adverse weather conditions |
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When should I use my credit card travel insurance?
The travel insurance package that comes with your credit card may not necessarily be the best policy for the type of trip you’re taking, so reading the small print is a must.
If you are travelling on a short business trip, you will probably find that the cover offered by most card policies is adequate. But if you’re going on a family holiday to Florida for example, you may have to take out additional insurance for each family member to ensure you’re covered for all the fun-filled activities you have planned.
Many holidaymakers have switched from using cumbersome travellers’ cheques and foreign currency to simply charging all their holiday expenses and purchases to their cards. This has two obvious benefits:
- You won’t have to cart around a purse full of pesos, and
- if your card provider offers it, insurance on all items bought on your card.
For those who are under strict instructions to bring Great Aunt Edna back an authentic Greek vase or some such expensive but easily breakable souvenir, purchase insurance is a necessity. The Amex Platinum Card offers this insurance to all items purchased, providing they’ve had no previous owners and aren’t sold privately. And the Capital One Cashback Card policy will cover any purchase over £50.
Credit cards also seem to be the preferred option for most travellers when planning their trips, with 59% of those asked in a survey by MORI Ipsos, paying for flights using their plastic. This could be largely down to the credit card companies only offering their travel insurance to customers who buy their flights and hotels with their cards.
The Egg Card only offers you travel insurance when you are travelling by a mode of transport that has been paid for by their card, similarly with the Capital One Cashback Card.
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So what should I be looking out for?
- Reading the small print of a card offering travel insurance is essential. You may find that you won’t be covered for a number of activities, for some modes of transport, and even when visiting certain countries.
- The Egg Card offers the cardholder a personal travel accident insurance policy providing the card account remains in use. The policy however, does not cover all aspects of your holiday.
- Hidden in the small print, it explains that the policy will only insure you for when you are travelling, either abroad or here in the UK, but won’t cover you for more general holiday mishaps. So, if you were on the beach in Tenerife and got stung by a jellyfish, your Egg Card insurance wouldn’t cover you for the medical expenses; however, worst case scenario, if you were on a sightseeing tour bus in Italy and it crashed, leaving you permanently disabled, you’d be able to claim on your policy.
Below is a table of what the Egg Credit card personal travel accident insurance policy will pay out:
| What you can claim for |
Payout amount |
| Fatal accident |
£50,000 |
| Loss of sight in both eyes |
£50,000 |
| Loss of, or loss of use of, two limbs |
£50,000 |
| Loss of sight in one eye |
£25,000 |
| Loss of, or loss of use of, one limb |
£25,000 |
| Permanent total disability |
£50,000 |
With cards that only offer partial travel insurance cover, such as the Egg Card or the Virgin Credit Card, it is often worth taking out additional insurance that better suits your needs, to guarantee you are totally covered for that bungee jump, camel ride or scuba dive.
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Other travel insurance options
You can buy emergency medical travel insurance for a single trip from the Post Office, or if you’re a frequent traveller, it may be cheaper to buy a year’s coverage. You can choose to insure just yourself, just your family or your entire entourage for single or multiple trips, for just the amount that you feel you need.
Visit our site to compare travel insurance
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What the experts say
Mark Bowerman for APACS, the UK payments association advises everyone to scout around for the best credit card travel insurance package for them: “It pays to shop around before you decide on a card, and to examine the costs and the travel insurance cover the policy is offering, as it may not suit your needs.
“As with any product or service you buy, whether it’s a broadband bundle or a new sofa, you must shop around before you part with your money, and always read the small print.”
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Our Recommendations
- Amex Platinum - The American Express Platinum card offers a comprehensive travel insurance policy to all its cardholders, and their families. There are no extra fees to pay to make use of the policy, and all aspects, from lost luggage to delayed flights, are covered. The insurance will not cover you if you’re on a gap year pack-backing across Australia however, as trips are only covered for 120 consecutive days at a time.
- Capital One Cashback Card - This card gives the cardholder $100,000 travel accident insurance, but, like many, only if the travel expenses are paid for using the card.
- Virgin Credit Card - Virgin’s card does not offer a policy when taking out the card, but cardholders are eligible for 10 per cent discount off all Virgin Insurance policies, as well as 10 per cent off Virgin holidays, meaning you could knock the price of your summer getaway down considerably.
- Egg Card - Like the Capital One Cashback card, the Egg Card insurance policy only covers claims that may occur whilst travelling to and from your destination, or while on an excursion during your stay. However, this is irrespective of whether you have paid for the excursions using your card.
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