No one likes to think about landing up in a hospital when on holiday, so travel insurance is usually not as important to many people as health insurance. Added to that is the high cost of insurance premiums. Most people are only too happy to foot any costs of cancellations and illnesses on holiday rather than paying for insurance they may never claim.
Did you know, however, that your account in certain banks could make you eligible for free coverage for certain mishaps on your vacations? Why not take advantage of these?
Free travel insurance through credit cards
Your credit card takes care of life’s little emergencies not only at home. Did you know that the next time you cancel a holiday you’ve already paid for or drop your cell phone in a cup of hot tea your credit card can help you cover the costs with little extra cost on your part?
If you use a credit card and pay an annual premium for it, why not use it to get your travel insurance almost free? I say almost free because the cost of your card premium is involved. In general, several high end cards offer complimentary travel insurance to users. Even if you have a platinum card for which you pay a steep annual fee of $100 a year, there’s a high chance you can qualify for the credit card company’s complimentary travel insurance. You have to judge whether the cover is decent, and you’re good to go!
Some cards offer special supplemental insurance as free perks, such as cell phone replacement coverage, insurance for car rental collision and cancellation insurance. However you should know that these complimentary insurances are pitted with exclusions, so they don’t always provide the comprehensive coverage of regular travel insurance.
So always be sure to read the fine print carefully to find out what is covered and what is not. There are several benefits however even if the coverage is not comprehensive. If you plan to hire a rental car on holiday, the rental car company’s insurance premium can be $30 a day, instead of which you can have your credit card company automatically cover accident costs. You have to rent the car with your card, however. If you have to spend $300 dollars on account of a rental collision, and submit the body shop bill along with other required documentation, you will usually be reimbursed in full. However note that injuries will not be covered by your credit card company.
Only 15 percent of credit cards offer trip cancellation coverage due to illness or cancellations of non-refundable flight tickets. However this doesn’t cover any cancellations due to a relapse of any pre-existing medical conditions that you may have. Weather-related delays and war zones are not covered by most cards however.
There are limits to the cell phone coverage that is offered by most cards as well. You will only be reimbursed, for one, if you pay your phone bills each month with your credit card. If the cell phone is stolen or is damaged beyond repair, you can usually get back up to $250. Read the fine print to find out situations for which coverage is not provided. Also, if you miss a cell phone payment, you’ll have to wait until the next month for your protection to be reactivated.
Some frequent flyer clubs also offer complimentary travel insurance coverage, with limitations, for members. While none of these are truly free since you’re probably paying membership premiums annually, they can be much more affordable than having to buy through a travel insurance agent. And you do get heavily discounted coverage for your holidays through them.
For backpackers and frequent business flyers, there can be great deals that are more affordable than multi-trip or long-term travel insurance offered by travel companies. English native speakers who are on ESL teaching holidays in South East Asian countries, for example, can benefit from the great coverage offers that come with Hostelling International USA (HI-USA). Backpackers will find plenty of deals and offers through such memberships that will take care of many out-of-pocket expenses during emergencies.
The point to remember is that whenever you shop around for travel insurance, make sure that you weigh the expenses of the trip with the costs. If you don’t use your credit card on a regular basis, you may be better off looking for other insurance alternatives. Ditto if your frequent flyer club doesn’t offer travel insurance policies.