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Smart Money

Credit card insurance: Are you covered?

Last updated

Pauline Hatch      

Credit cards are like the swiss army knife of finance products; they come with a ton of tools that can help you make or save money. Free insurances – a massive variety of them – are on of their best and biggest money-saving tools. Let’s look at the types of insurance you can get with credit cards.

What do these insurances offer? Are they worthwhile?

Travel Insurance

Travel insurance is one of the most common types of credit card insurance. Some of the best rewards credit cards, Gold and Platinum credit cards often offer ‘complimentary’ travel insurances.

Overseas Travel Insurance

This type of insurance usually works in much the same way as traditional travel insurance, covering medical expenses, travel cancellation, lost luggage, travel documents, personal liability and more.

The amount of cover on offer will vary according to the credit card provider, so check the small print before you travel. You will usually have to use your credit card to purchase travel or accommodation costs to be covered, and you may only have cover for a certain number of days per year.

Interstate Flight Insurance

This offers cover on interstate flights within Australia, so if you have to cancel or amend an interstate flight due to serious illness, or if your luggage is lost or delayed, this insurance could cover that.

Transport Accident Insurance

If you use your credit card to purchase your travel, this insurance offers cover if you or members of your family die or are seriously injured in an accident while travelling.

Domestic Hotel Burglary Insurance

This will cover the loss or damage of your personal items up to a certain dollar amount if your hotel or motel room is burgled while you are travelling (usually within Australia).

Rental Excess Cover

This cover can be included within a general credit card travel insurance policy, or it can be a standalone cover. If you are in an accident in a rental car (paid for by your credit card), this insurance will reduce the excess you have to pay.

Purchase Insurance

Another common type of credit card insurance is purchase-related insurance.

Price Protection Insurance

If you buy an item within Australia with your credit card, and then find the item advertised elsewhere at a lower price, this insurance will reimburse you the difference. Price protection, which is also known under names like ”guaranteed pricing scheme” and “price guarantee protection”, is designed to help you get the best price on products no matter when you buy them.

Purchase Protection Insurance

This insurance can cover you if you buy a new item with your credit card and the item is stolen or accidentally damaged within 90 days.

Extended Warranty Insurance

If you use your credit card to purchase a new electrical appliance within Australia, this insurance offers an automatic 12 month extension on the item’s original Australian manufacturer’s warranty. On things like televisions, music players and even computers (if the manufacturer’s warranty is less than five years).

While purchasing an extended warranty, which so many sales representatives recommend when you buy electronics, could cost you around $100 more, this feature means it is free if you pay with your credit card.

Health Insurance

We have not come across any credit cards in Australia that offer health insurance. As there are so many different types of health insurance, it’s important to choose the policy that specifically meets your needs.

While you can’t get credit card health insurance, you can still find health insurance that saves you money. One way to save money is to compare all your options and choose a policy that only covers what you need.

Another way to save money is to choose a ‘Not for Profit’ health insurance provider, such as GMHBA. With no shareholders to worry about, this type of health insurance provider reinvests any surplus revenue to minimise premium increases and deliver new health and wellness programs.

Life Insurance

Again, life insurance is not offered on any credit cards that we know about. However, you may find that your super fund or your employer already have a life insurance policy for you. Check to find out if you’re covered, and how much cover you have.

Making the most of credit card insurances

With credit card insurances, the most important thing to remember is to check the terms and conditions. Don’t rely on any type of insurance until you have read the small print and you know you are covered.

Pauline

Pauline Hatch

Pauline is a personal finance expert at CreditCard.com.au, with 8 years in money, budgeting and property reporting under her belt. Pauline is passionate about seeing Aussies win by making their money – and their credit cards – work smarter, harder and bigger.

Recently Asked Questions

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Ask Pauline a Question

Hi, I’m a personal finance expert who loves to help you out! I’ll answer your question within a business day. Pinky swear.

We ask for your email so we can respond to you directly. We won’t share your personal data. For more information, see our privacy policy.

2 comments (showing the latest 10 Q&As)

Penny

Penny

14 November 2021
Hi. Do I need to purchase the full amount of a cruise on my credit card to be eligible for free travel insurance?
    Pauline - CreditCard.com.au

    Pauline

    15 November 2021
    Hi Penny, usually you’ll need to purchase the round trip cruise on your credit card to be eligible for the complimentary travel insurance. Please note that different credit cards have different T&Cs and exclusions for their travel insurance. I would suggest reaching out to your bank directly to get the full details. Have a great trip!

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