More and more people are opting in for the cheapest things to buy by shopping around, using point and finding places that obtain ‘freebies’. Holiday travel insurance is one of those things.
Everybody loves a freebie, or at least the illusion of a freebie and many do not know that they can obtain a travel insurance policy without having to pay additional costs.
The majority of all major credit cards and even the smaller sized companies are using ‘free’ travel insurance to encourage their card holders to purchase their travel using their cards.
This has both pros and cons which includes being able to stock up on your frequent flyer points, if the program is also attached to the card.
So not only are you increasing your flyer miles you are also obtaining a travel insurance policy.
There are a number of things that you absolutely need to know when using your credit card for travel insurance.
The first and most important point is that by paying your travels using your card does not automatically give you a policy. You must contact your financial institution and advise that you’ve made your purchase.
You will then need to prove you’ve paid for the travel in full and must show provide them with the itinerary that is booked. Once this is done they will then provide you with a policy number.
I advise that you double check with your card provider that a) you will be covered and b) what are the conditions.
As this is a ‘free’ cover which is more of a benefit of the card the coverage is only basic… very basic. Some may only cover medical up to a couple a thousand for instance. Medical bills could sky-rocket way over this limit in some countries. So do make sure you check the policy details before decided.
For high risk countries which are listed as Africa, Middle East and even USA I would recommend getting better holiday travel insurance to cover you. As the medical bills and the risk of theft for example will be higher than what your credit card company is willing to pay.
Lastly, I use the word ‘free’ loosely in this article because let’s face it… nothing is truly free. If you book using your credit card you are going to get slapped with a fee often between 2-5% of the purchase.
Therefore if you are paying $3,000 for your travels then you could pay between $60 and $150.
This is where you need to consider what’s best for you. For $150 you can probably obtain a medium to full coverage insurance policy with all the bells and whistles. So why would you use the extremely basic cover for the same price.
Granted, you may book online and get slapped with the fees for credit cards anyway, the alternative being going to the office or agency and paying cash or using Eftpos. So again this is where it comes down to what is best for you.
You can certainly save money on your holiday travel insurance policy by using your credit card, the only catch is your limited to what you’re covered for.