Travelling is not always a pleasant experience as things can go wrong at any moment of your journey. This is the primary reason to buy travel insurance in advance as it provides financial security in case of untoward incidents like accidents, luggage theft, etc.
Many travellers tend to assume that the financial protection provided by a traditional travel policy is the same as the coverage that their credit card offers. However, in most cases, their assumption is wrong.
Continue reading to know whether or not credit card travel insurance coverage is enough or should you invest separately in a traditional baggage insurance policy for your next trip.
Is Travel Insurance Offered by All Credit Cards?
No, presently all credit cards do not come with travel insurance. There are a few that provide basic coverage, but the benefits offered by these credit cards are generally limited in comparison to a traditional travel insurance policy.
If your credit card does come with a travel insurance benefit, you need to contact your respective bank to find out its terms and conditions in detail.
Some important questions you could ask would include whether or not medical costs, trip cancellation insurance, student travel insurance, etc., are covered by the credit card.
Common Travel Insurance Coverage Options under Credit Cards
Delayed or Lost Baggage
Oftentimes, credit card travel insurance coverage includes reimbursement for stolen, lost or even delayed checked-in luggage. This insurance provides reimbursement for essential purchases, like toiletries or clothing, till such time you receive your baggage.
Trip Interruption/Cancellation
There are credit cards with trip cancellation insurance that include reimbursement for your non-refundable trip costs in case your trip gets cancelled or is interrupted due to reasons covered under the travel insurance terms and conditions, like injury, illness or bad weather.
Dental or Medical Emergency
Sometimes credit cards with travel insurance included provide financial coverage for medical and/or dental emergencies. This coverage is applicable when you are travelling and generally includes medications, hospitalisation and surgeries. It proves to be financially beneficial during international travel, where the cost for medical care can be expensive.
Repatriation and Emergency Evacuation
Generally, the best travel credit card with travel insurance includes coverage for emergency medical evacuation. It covers the expenses involved with repatriation and emergency evacuation to a preferred medical facility.
Reasons to Opt for Travel Insurance Separately
The main difference between credit card and travel insurance is that the latter offers extensive coverage, which includes baggage-related coverage, trip delay or cancellation, emergency evacuation, medical costs, dental treatment, personal liability, etc. Here are some other reasons why opting for a separate travel policy can be beneficial for you.
- Limitations and Exclusions – Generally, credit card flight insurance comes with a low limit and may exclude specific situations, like adventure sports or pre-existing diseases. Investing in a traditional travel policy will prove beneficial if you require a higher coverage limit or have particular requirements.
- Customisation Option – Even the best credit card for travel insurance will not provide you with the flexibility of customising your coverage needs based on your specific travel needs, which is possible when you buy a separate travel plan for your trip. With a travel policy to safeguard your finances, you can select the policy terms that match your trip’s nature and duration, such as extension of your trip.
- Risk Factor – If you depend solely on your credit card for travel insurance, your protection during the entire trip is bound to the credit card. In case of your credit card being stolen, lost or even cancelled, you lose protection during your trip.
Conclusion
Although credit card travel insurance seems to be attractive because it appears to be free of cost, it falls short in terms of coverage in comparison to other travel plans in the market. Traditional travel plans are more flexible and offer better coverage when it comes to medical expenses, loss of personal possessions, etc. Moreover, travel policies available online from insurers like TATA AIG come with customisation options, making them more beneficial than travel insurance provided by credit cards.
Frequently Asked Questions
- Does a credit card give you travel insurance?
Yes, there are some credit cards that come with travel insurance as a complimentary feature. This benefit safeguards you financially from unanticipated travel-related mishaps.
- Does a credit card have insurance coverage?
Yes, insurance coverage is provided by a few credit cards, which include credit card payment insurance, travel insurance, purchase protection, etc.
- How is credit card insurance different from a travel policy?
Travel insurance, when compared to credit card insurance, provides broader coverage. Travel insurance is also customisable and flexible in comparison to credit card insurance.
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