Credit card Guides

Credit card travel insurance - holiday from hell?

Updated: Thursday 7 April, 2011

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 were all the rage a few years ago, as credit card providers were anxious to attract new business and did so by offering a raft of attractive perks.

These days, a few card companies still offer free travel insurance, but consumers should be aware of the limited extent of events covered by the insurance and also if the card provider might hit you with an annual fee for a service you might not use.

Our guide looks at the different insurance policies that are offered by leading credit cards, and weighs up whether the cover is adequate for your needs, how much it might cost you in annual fees and charges or whether it’s worth taking out additional cover before you pack your bags.

• Am I covered?
• When should I use my credit card travel insurance?
• So what should I be looking out for?
• Other travel insurance options
• Our Recommendations

Am I covered?

While a number 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 cover does not apply to the traveller before they travel or after they arrive at their destination, it covers them literally while they're travelling. The moment you step off the aircraft, the cover stops and only starts again when you board the aircraft for the return flight.

Therefore cancellation cover, travel delay, missed departures and damaged or stolen possessions are not covered, making credit card travel insurance insufficient for many travellers’ needs.

Also with any credit card – especially if it’s also an AirMiles card - check if the insurance offered is “AirMiles Cover” or “Credit Card Cover”: AirMiles Cover is for any time during the trip; Credit card cover is only whilst travelling. So check before travelling.

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. But this card is for high-net worth individuals and comes with an annual fee of £300, whereas annual family worldwide travel insurance starts from around £70.

Another credit card to offer “proper” travel insurance is the M&S Premium Card which comes complete with free worldwide multi trip family travel insurance as one of a number of “free” perks. However, it comes at a price: The card currently charges a monthly fee of £15 (£180 a year).

Therefore, if you’re considering a card like the Amex Platinum or the M&S Premium, it’s best to work out whether the benefits offered by the card justifies paying the monthly or annual fee the card levies. As with “free” lunches, when it comes to “free” travel insurance, things are rarely actually free.

Back to the top

When should I use my credit card travel insurance?

As we’ve seen, 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, especially if it’s your company credit card, but you should check that the company sending you abroad has short-term traveller insurance and that you’re covered.

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 or the family as a whole to ensure you’re covered for all the fun-filled activities you have planned.

But if you do have a card that you dimly remember offered “free” travel insurance as a perk when you applied for it, recheck the terms and conditions because what you remember as “fully covered for every eventuality” could be anything but.

For example, the Egg Card only offers travel insurance when you are travelling by a mode of transport that has been paid for by their card and ONLY while you are travelling (see above). However, as Egg is no longer accepting new applications for its card, this applies to existing Egg Card customers only. And Egg itself is keen to tell its existing cardholders, this cover is “not a substitute for travel insurance”.

Back to the top

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.

If you’ve had the card for a while and intend travelling abroad and relying on the travel insurance that came as a perk when you originally took the card out, it’s essential you re-check the details on the card issuer’s website to ensure it still covers what you want it to cover. Card issuers are well known for quietly removing perks and not informing the cardholder.

Back to the top

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 of cover you feel you need.

Visit our site to compare travel insurance

Back to the top

Our Recommendations

• Amex Platinum - For a fee of £300 a year, the American Express Platinum card offers a comprehensive travel insurance policy to all its cardholders, and their families, and all aspects, from lost luggage to delayed flights, are covered. The travel insurance covers you for a maximum of any 240 days in a 365 day period and for single trips up to a maximum duration of 120 consecutive days
• Virgin Credit Card - Virgin’s card does not offer any travel cover when taking out the card, but cardholders are eligible for 10 per cent discount on 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
• Marks & Spencer Premium Card - Comprehensive multi-trip family travel cover included – but at a price of £15 a month. However, the card also offers its cardholders additional perks such as triple points on anything bought at M&S, £10 of M&S vouchers on your birthday, a further £40 of vouchers annually and £124 a year to spend on hot drinks in M&S’s in-store cafes.

But whenever you travel abroad – and however you travel, however long you go for and whatever you do when you get there – travel insurance isn’t a luxury it’s a necessity.

Last year, Foreign Office figures showed that the average cost of medical treatment for holiday injuries to uninsured Brits was £24,000 and even a week's hospital stay in Greece can cost £5,000.

Back to the top