Credit-card travel cover:good to go?
This article appeared in the 1st Quarter 2016 issue of Personal Finance, used with permission.
Many of us hop on a plane to an overseas
destination thinking – or, rather, hoping – that
the travel insurance we receive courtesy of our
credit cards will be sufficient if something goes
wrong. But, as Martin Hesse reports, the limits
and exclusions on automatic credit-card insurance may
leave you significantly exposed.
If you are about to go on holiday overseas
and are relying for travel insurance on the
automatic cover that comes with paying by
credit card, you might need to take a closer look
at what the policy covers. The chances are, very little
indeed. On most of the lower-level (blue, classic and
silver) cards, you have emergency medical cover of
only about R150 000 – about US$11 000 when this
article was written in November 2015 – and you are
not covered for lost baggage, stolen personal effects or
cancelled flights.
Credit cards have been part of life in South Africa
since the early 1970s, and one of their features is free
(or "automatic", as it is referred to in this article)
travel insurance, particularly for foreign trips, if you
buy your travel tickets with your card. The number of
people who have had the benefit of this insurance
over the years probably amounts to millions, but how
many of those travelled in the full knowledge of what
they were covered for, and for how much?
As with other types of insurance, many people read
the small print only if they have to claim – or, worse,
if their claims are rejected. But ignorance of policy
conditions and even the basics of how much you are
covered for versus how much you need, seems to be
particularly common with travel insurance.
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