Free domestic travel insurance credit cards
Free domestic travel insurance, commonly referred to as complimentary insurance, is a feature available on many credit cards – typically rewards credit cards.
It entitles you to varying levels of insurance cover when you book travel within Australia using your credit card. While the insurance is referred to as ‘free’ or ‘complimentary’, it’s usually offered with cards that charge annual fees. However, it could still be cheaper or simpler than taking out standalone insurance policies.
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What does free domestic travel insurance cover?
While different credit cards offer different levels of coverage, free domestic travel insurance generally includes:
- Luggage cover: For loss, theft or damage to personal items
- Luggage delay: For purchasing essential items if your luggage is delayed or misplaced
- Cancellation fees: For rearranging or cancelling flights due to injury, accidents, extreme weather, unforeseen circumstances etc.
- Flight delays: For accommodation expenses if you experience extended flight delays
- Personal liability: For if you accidentally cause injury or damage to another person or their property
- Rental vehicle cover: For excess payments on a rental vehicle’s insurance if an accident or theft occurs
- Additional expenses: For miscellaneous travel and accommodation expenses if you’re no longer able to travel
What are the pros and cons of credit cards with free domestic travel insurance?
While free domestic travel insurance is an attractive credit card feature, it often means paying a higher annual fee. What’s more, exclusions often apply to the insurance, so it’s important to always read the terms and conditions.
- Frequent travellers may save on travel insurance
- You can often get the same benefits as standalone policies, for less
- It takes the hassle out of comparing travel insurance policies
- Different card options can give you control over your coverage and how much you spend
- Many policies also cover your spouse and children when they travel with you
- Your card policy may cover you for the same price at any age, unlike standalone policies which can charge higher premiums for younger or older travellers
- A range of destinations may be covered for the same price, unlike some standalone travel policies
- A wide range of terms and conditions can mean you’re not covered for certain situations
- You’ll typically pay a higher annual fee for the credit card to cover the ‘free’ insurance
- To be eligible for the travel insurance, you often have to activate your policy or use your card in a certain way – so always check your card’s terms and conditions
- If you don’t travel frequently, the insurance might not be worth paying the higher card fee
- Certain exclusions and excess payments can still apply, hitting you with unexpected costs
- Credit card travel insurance policies generally cover trips of a certain length (e.g. up to 31 days or three months)
- Standalone travel insurance policies can be more extensive (e.g. offering broader insurances up to higher amounts)
How to compare credit cards with free travel insurance
As well as looking at the free insurance coverage offered with the credit card, including what is and isn’t covered, plus any terms and conditions, it’s important to consider the credit card’s other features, benefits, fees and charges, including:
- Interest rate: How much extra you may be charged on purchases
- Annual fee: What you’ll pay each year for access to your credit card
- Interest free days: How long you’ll have each billing cycle (often monthly) to clear your credit card debt, before you’ll start being charged interest on your purchases
- Rewards programs: Will you earn points on your credit card spending to redeem on special discounts, products and services?
- Other fees and charges: Find out if you’ll need to pay extra for overseas spending, currency conversion, or making cash advances
Remember that the more features and benefits a credit card offers, the more likely it is to have a higher interest rate and/or annual fee. Before you make an application, think about if the value of these benefits may be worth the extra costs. Compare different credit cards to work out which ones may best suit your needs.
Senior Financial Writer
Mark Bristow is a senior financial writer for RateCity and an experienced analyst, researcher, and producer. Working for over ten years, Mark previously wrote and researched commercial real estate at CoreLogic, and has seen articles published at Lifehacker and Business Insider, among others. Most recently, Mark has joined RateCity working across finance as a whole. Whatever the topic, Mark’s goal is always to provide simple solutions to complex problems.
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