What Does ‘Complimentary Travel Insurance’ by Credit Cards Cover And Is It Enough?

Look through marketing material for any credit card (cashback or miles), and you’re likely to see 'complimentary travel insurance' listed as one of the perks. What does it cover and is it enough?

What does "complimentary travel insurance" offered by various credit cards actually cover?

First off, cardholders can activate this benefit simply by charging the cost of their air tickets to their card. 

But does this mean you can forgo buying separate travel insurance altogether? It depends, because not all complimentary travel insurance is made equal. Some banks provide bare bones protection, while others offer comprehensive coverage. 

To help you sort the wheat from the chaff, let’s take a closer look at the complimentary travel insurance policies offered by some common credit cards. 

What do I need to be covered for?

Here are some key events you’ll definitely want to cover yourself for before you travel: 

• Accident: Pays a predetermined lump sum in the event of death or serious injuries with permanent effects, e.g loss of sight or limbs
• Medical Expenses: Reimburses qualifying medical expenses incurred overseas
• Medical Evacuation: Covers the cost of relocating an injured or sick person to another location for medical treatment
• Trip Inconvenience: Covers events like luggage delays, lost/damaged luggage, flight delays and trip cancellation

Other potential areas of cover include theft of personal belongings, loss of passport, rental vehicle excess and damage to the contents of your home while you’re away. These are useful to have, but not on the same level of importance so we’ll exclude them for this article. 

What coverage do credit cards provide?

Let’s look at some entry-level credit cards in Singapore (defined as those with income requirements between $30K-50K per year) to see what coverage they provide. 

Do keep in mind that cards from the same bank can have different travel insurance coverage, e.g the HSBC Visa Infinite offers superior coverage to the HSBC Revolution. Always refer to individual card T&Cs for the full details 

As the table above shows, some of these complimentary policies shouldn’t really be called “travel insurance”: they’re more like personal accident policies. For example, the AMEX Platinum Credit Card, DBS Altitude and UOB PRVI Miles don’t cover any travel inconvenience or medical expenses, and I certainly wouldn’t be comfortable relying on them as my sole source of coverage. The only card here that offers somewhat comprehensive coverage is the Citi PremierMiles Visa. 

The picture improves if we look at higher-end credit cards (defined as those with income requirements between $120K-150K per year)

Coverage is generally better for these cards, both in scope and dollar amounts. However, I still wouldn’t be comfortable relying on this alone, as most of the policies here do not cover trip cancellation, and only a few cover medical evacuation. 

My pick of the lot would be the travel insurance offered by the HSBC Visa Infinite, which covers loss of personal belongings, personal liability, rental vehicle excess and post medical expenses in Singapore. 

Other things to note about complimentary travel insurance

Although it’s generally true that coverage is automatically activated if you pay for your tickets with your credit card, do pay attention to the wording in the T&Cs. 

Award tickets

If you redeem a flight with your airline miles and use your credit card to pay the taxes and fees, coverage may not be activated with certain cards like SCB, Maybank and OCBC. These cards require you to charge the “full fare” to activate coverage, and when you redeem an award ticket, your base fare is technically paid for with miles. 

Coverage for traveling companions

Certain travel insurance policies cover you and you only, while others extend coverage to traveling companions and immediate family.

Age and trip duration limits

This won’t affect the majority of people reading this article, but certain policies do exclude or offer lower coverage for those aged above 65 at the time of departure. Others cap the maximum duration of a covered trip to 30 days.

Can complimentary travel insurance replace a stand alone policy? 

With the exception of the HSBC Visa Infinite and the Citi PremierMiles Visa, most of the complimentary travel policies listed above omit coverage in one or more key areas. 

Therefore, I don’t think it’s a good idea to rely on them as a replacement for a separate travel insurance policy. Given that travel insurance can cost as low as $6 a day, it’s pennywise and pound foolish not to get yourself covered properly.

If you have two travel insurance policies in effect, you won’t be able to “double claim” reimbursements such as medical expenses.However, if the coverage provided by one policy is insufficient, you’ll be able to use the second to “top up” the difference. Moreover, it is possible to make multiple claims on events like loss of life or disability. 

Conclusion

Complimentary travel insurance is a nice perk, but at the end of the day, it’s rarely sufficient enough to be your only source of coverage. Paying a little extra for a comprehensive travel insurance policy can be the difference between peace of mind, and fretting over a mountain of bills – that makes it a no brainer for me!

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