The uptake of free travel insurance through premium credit cards in Australia is huge, with hundreds of thousands of travellers taking advantage of the service.
But travellers should realise the limitations of this type of insurance, especially with regards to claims relating to terrorism, which is becoming a growing concern.
An investigation by The Australian newspaper has revealed that nearly 70% of free travel insurance policies offered by banks and financial institutions through platinum, gold, black and other credit cards offer absolutely no terrorism cover, while almost 80% offer no hospital and evacuation cover in the event of terrorism.
According to the report, the shortcomings leave affected travellers exposed to potentially huge medical and repatriation bills, especially if lengthy hospital stays are required.
Although paid insurance policies have some exclusions for terrorism, free credit card insurance was found to be largely inferior in covering terrorism.
“A lot of people do insurance on their credit cards, but you have to look at the fine print,” one of Australia’s best-known terrorism victims, Bali bombing survivor Peter Hughes, told The Australian.
“Most of them are crap. They’re a gimmick, 100 per cent.”
When Mr Hughes recently discovered that he was entitled to one of the insurance policies on his credit card, he asked himself what it would cover.
“The answer was, very little. Then my partner was offered free travel insurance on her card, and found much the same thing. The thing is, they’re not a full cover,” he said.
The Australian’s investigation covered nearly 100 credit cards from 18 major Australian banks and financial institutions.
Twelve institutions – Westpac, Citibank, Suncorp, Bank of Queensland, St George Bank, Bank SA, Bank of Melbourne, Bendigo Bank, HSBC, Bankwest, Virgin Money and Heritage Bank – were found to offer no coverage on their high-end cards for terrorist attacks.