Is it worth using the free comprehensive travel insurance offered by many credit cards, or are you better off just buying the cover?

For most of us, having free cover means we use it because it doesn’t cost anything and it’s there. But at least take the time to check the level of cover you’re being offered and whether there are potential pitfalls that may make it more cost-efficient in the long run to pay for a more comprehensive policy.

The Australian Financial Review asked comparison site to compare insurance policies offered free to card holders. All policies offer unlimited medical cover, but there can be other differences, such as the limit on laptop replacement in the event of theft, that can make the difference between being irritated or thrilled by free cover.

‘It’s very unusual to get something for nothing, especially when it comes to credit cards,’ says Finder spokeswoman Michelle Hutchison. ‘While it’s great to see that many credit cards offer complimentary travel insurance, there are usually costs involved, and that may end up costing travellers more than taking out cover from a direct provider.’

The excess, how much you have to pay towards replacing something when you make a claim, can be a key irritant, especially when you have to pay it more than once. When you buy a travel insurance policy you can pay a bit extra to waive the excess – also called an ‘excess eliminator’ – but most free policies offered to credit card holders don’t offer this.

And as you can see from the table, some of the policies compared charge a flat $250 excess while others vary this depending on the nature of the claim. As an example, Hutchison cites the ANZ Low Rate Platinum card that does not charge an excess on travel delays, gold and surf equipment.

What about that stolen laptop? If you’ve got the ANZ card, you’ll be able to claim up to $4000 a laptop, but $5500 in total on the Bankwest Breeze Gold card or Bank SA Platinum card, both owned by Westpac.

If you’re hoping to use your card’s free cover on your next trip, make sure you know how to activate it. Years ago, you were required to pay for the whole trip on the card, but now it ranges from $250 to $1000.

For more information on travel insurance please visit

Posted by Debra Cleveland – Australian Financial Review on 23rd January, 2014