Everyone loves a freebie, especially when it is at the expense of a bank that makes multibillion dollar profits every year. For the majority of travellers, they pick up their travel insurance as they would their tooth brush on the way out the door.

Everyone loves a freebie, especially when it is at the expense of a bank that makes multibillion dollar profits every year. For the majority of travellers, they pick up their travel insurance as they would their tooth brush on the way out the door.

Many again rely solely on the free insurance that comes with their gold or platinum credit card. The problem with any insurance policy is that the only way to test how good it is, is to make a claim against it. Quite often by this stage it is too late.

Travel insurance providers love to tell tales of travellers who have come unstuck with “limited” or “restricted” credit card travel insurance policies. Seriously though, what more would you really expect from their marketing department?

If you fall outside the fine print of a travel insurance policy and the insurer refuses to pay up, it can quickly become a very expensive and desperate situation. As insurance experts, we would like the share the following warnings with you.

Free travel insurance that comes with credit cards is “very basic” cover, at best. Otherwise known as “Claytons cover” – the insurance you get when you’re not really buying insurance.

One off the biggest problems we come across at McKenzie Ross is that credit card travel insurance does not usually allow for pre-existing medical conditions to be taken into account.

“If you’ve had a heart attack in the past or you’ve got high blood pressure, low cost operators are always looking for a “get out” clause not to pay.

Credit card policies also have a limited maximum trip duration, offer a restricted cancellation cover and no protection in the event of kidnap or political evacuation with little or no death cover.

McKenzie Ross divides travel insurance in to three levels of cover:

• Credit Card
• Retail
• Corporate Travel

Those with a corporate cover have the best protection, with retail policies being a better choice than free credit card insurance.

As broker’s one of the biggest challenges we face is overcoming insurance company marketing. TV ads for insurers suggest insurance is simple, it’s all the same and lowest price is the best.

All we can say in response is buyer beware – there is a massive difference between what different policies offer, and there is a massive difference in customer experience with different insurers come claim lodgement. At the end of the day, you want to be able to claim legitimate losses when something unexpected occurs.

Claims experience is vital in medical situations. If you’re overseas and trying to deal with someone in Mumbai who doesn’t speak English, your situation can become very difficult very quickly.

If your luggage gets knocked off from a hotel lobby whilst you check out of your hotel and it’s only a metre away from you do you want the insurer to deny the claim on the basis the luggage was unattended?

Do you want to argue the toss come claim time about what a pre-existing medical condition is and what should be disclosed?

If you still choose to stick with the travel insurance provided through your credit card, the most important thing to check is the conditions around how cover is activated.

Some cards require you to pay for your entire trip on your card. This is easier said than done as many airlines and travel companies discourage credit card payments or slug you with a 5% surcharge for the privilege. Others require only the bulk of your trip or your airfare to be paid through the card.

Do your due diligence. Take time to check the policy wording, paying attention to the exclusions, and see how the coverage compares to a stand-alone or corporate policy.

For less than $1,000 a year you can also invest in a Corporate Travel policy which delivers broad coverage for the benefits that matter most. The cover can also be tailored to meet the various needs and budgets of the policy holder.

Corporate travel policies cover ALL business related travel in excess of 50kms by any employee PLUS all leisure travel for directors, senior managers, their accompanying spouse or partner PLUS dependent children.

Just remember that cheapest is not necessarily best when it comes to travel insurance.