Is credit card travel insurance any good? - Times Money Mentor (2024)

We explain how travel insurance on credit card works and look at the pros and cons of using it.

Some rewards credit cards offer travel insurance. However, your credit card is unlikely to give you all the cover you need as full medical insurance is not included.

This article will cover:

  • How does travel insurance on credit card work?
  • Which credit cards offer free travel insurance?
  • Should I pay for my holiday with a credit card?
  • Travel insurance or credit card?
  • How do you claim money back on travel insurance?

Related content: What are my flight refund rights?

How does travel insurance on credit card work?

First, it’s important to establish what is meant by travel insurance. If you mean getting a refund if the trip is cancelled or goes wrong, then yes, you may be.

Credit card providers are bound by strict consumer laws set out in Section 75 of the Consumer Credit Act, which covers purchases of £100 to £30,000 should the merchant be liable to you.

But credit card providers do not offer full travel insurance, as they do not pay out for medical issues that may arise during a trip overseas.

They will also not necessarily pay out in the event of lost luggage and do not necessarily include other features that are common in standard travel insurance policies, such as personal liability.

Some providers offer “travel accident insurance” – sometimes for free – but this is not necessarily as comprehensive as full medical cover offered through standalone travel insurance policies.

Accident insurance covers accidental death or an accident resulting in permanent injury such as loss of limb or sight. But hospital treatment for less “serious” conditions is not covered.

There is a card that offers comprehensive travel insurance, including medical cover. This the Platinum card from American Express, which comes with a fee of £575 a year. However, be mindful that each travel insurance policy comes with its own specific policy terms.

But this is a charge card, not a credit card. The difference is that, unlike with a credit card, the customer has to pay the entire balance each month and does not come with any protection under Section 75 of the Consumer Credit Act.

Credit cards that offer free travel accident insurance

American Express is the only credit card provider in the UK that offers freetravelinsurance.

The best credit card for travel insurance will depend on how much you are willing to pay, and what you want covered.

  1. American Express Platinum Cashback Everyday – Annual fee: £0
    What’s covered? Travel accident insurance worth up to £150,000. Travel delay: no
  2. American Express Preferred Rewards Gold – Annual Fee: £140 (£0 in first year)
    Travel accident Insurance: £250,000, Travel delay: Yes, up to £600.
  3. American Express Rewards – Annual Fee: £0
    Travel accident insurance: £150,000, Travel delay: no.
  4. British Airways credit card (American Express) – Annual fee: £0
    Travel accident insurance: £75,000. Travel delay: no.
  5. Vitality (American Express) – Annual fee: £0
    Travel accident insurance: £150,000, Travel delay: no.

There is also the Chase Sapphire Reserve card. This offers generous travel rewards, but this card is not available in the UK.

There may also be other credit card providers that provide Travel Insurance as an add on or at a discount. For example, the Santander World Elite card offers a 40% discount ontravelinsurance.

Should I pay for my holiday with a credit card?

The main benefit of using a credit card is the payment protection.

Under Section 75, UK consumers are protected if something goes wrong with a purchase, for which the merchant would be liable for, costing between £100 and £30,000.

So if your holiday does not go ahead for some reason of which the merchant is liable for, you should get your money back if you have paid through a credit card (depending on the reason for the cancellation).

Some merchants used to charge extra for payments made through a credit card.

But the surcharges have been banned since January 2018. So paying for holiday expenses using a credit card should not cost you any more than paying through a debit card.

Before using a credit card, ask yourself if it is likely to take you a long time to pay the money back. If you fail to pay the full balance of your card by the due date, you may be charged interest that will bump up the cost even higher.

Find out more: Nine things that you need to know before booking your next holiday

Paying for holidays on a credit card

Section 75 of the Consumer Credit Act gives you a good chance of getting your money back should your trip not go ahead as planned.

If you have booked a holiday or flights costing between £100 and £30,000, and paid either a deposit or the full price on your credit card, you should be able to make a claim if:

  • The airline goes bust
  • The holiday company goes bust
  • Or the holiday isn’t as described.

The good news is that you don’t have to pay for the cost of the entire holiday on a credit card to be covered by Section 75.

Even if you just put a small deposit on a credit card and want to pay the rest in cash or using a debit card, you are still entitled to a full refund if something goes wrong.

The key is to fund part of the holiday using a credit card. This could be just a £50 holding deposit.

There is no minimum amount that needs to be paid on a card, as long as the cash price of the product (for example, a flight, hotel or travel package) is between £100 and £30,000.

But not all situations are covered by Section 75, as discussed below.

What is typically covered?

  • A cancellation by the travel provider.
  • The travel company, airline or accommodation provider going bust before or during the trip.
  • The holiday not being as described.
  • Additional expenses as a result of an issue that is not your fault. For example, if the airline collapses while you are away and you have to pay for more expensive flights to get home.

What isn’t covered

  • If you paid for your holiday through a third party – for example, PayPal or Amazon marketplace. However, these often have their own payment-protection schemes, which do not necessarily afford the same level of protection as that of Section 75.
  • The purchase was made by a family member using an additional card – unless the main cardholder is also on the trip.
  • You choose not to take the holiday because you have changed your mind.
  • The credit card is used to make a cash withdrawal, and you then pay for the holiday using that cash.

Will my credit card cover a holiday cancelled due to the coronavirus?

Travel rules and restrictions have changed frequently over the past 18 months.

As discussed above, the protections provided by Section 75 mean you should get your money back if you have paid money in advance for a holiday that can no longer be provided because of the Covid-19 pandemic.

If you have paid for your trip using a debit card, you can make a claim using chargeback. This is when the bank tries to reclaim the money you paid to the holiday company on your behalf.

Credit cards also have their own version of chargeback. This could be another route if your claim doesn’t meet the criteria of Section 75.

Travel insurance or credit card?

Many will wonder whether their credit card offers enough protection or whether to buy travel insurance on top to ensure they are “fully” covered.

The answer is that you need to review or seek independent advice on the terms of the policy provided via your credit card provider, to establish whether you would benefit from taking out a separate travel insurance policy to ensure that you are covered for additional eventualities.

This is because comprehensive medical cover, essential for trips abroad, is primarily offered by insurance companies and not by credit card providers.

If you need hospital treatment abroad and do not have health insurance, medical expenses could run into thousands of pounds. According to an example from the Foreign Office, a fall in Spain that results in a broken hip, hospital treatment and an unplanned flight back to the UK would cost you about £15,000.

When taking out health travel insurance, you must state whether you have a pre-existing medical condition.

Full travel insurance will typically include contingencies for common travel problems such as transport delays, lost luggage or stolen items.

However, paying by credit card offers a good chance of financial compensation if your trip doesn’t go ahead as planned.

In some cases it may be better to make a refund claim through your card provider, rather than through your insurer. This is because some travel policies charge an excess fee for claims.

For more information: What are your travel rights?

When should I purchase travel insurance?

  • You should consider travel insurance for any trips abroad. Most importantly, to ensure you are covered for any medical emergencies. If you have pre-existing conditions, these can also be covered as long as you have declared them, but you will likely need to seek out a speciality policy that covers pre-existing conditions
  • For peace of mind, to get help and redress for common problems such as lost luggage, baggage delay or a stolen passport.

The strengths of credit card travel protection

  • Gives protection if the travel company goes bust
  • Should deliver a refund if the holiday provider doesn’t deliver as promised
  • Will likely not charge an excess fee for making a claim

How do you claim money back on credit cards?

When making a claim, your card provider will expect you to have tried to negotiate with the holiday company first.

If this fails, keep copies of all correspondence and then approach your credit card provider. There might be a phone number on the back of the card. Alternatively, contact details will be given on their website.

Travel insurance providers also expect travellers to chase a refund with the holiday company before making a claim.

It is worth bearing in mind that not all travel insurance policies cover coronavirus-related disruption.

Important information

Some of the products promoted are from our affiliate partners from whom we receive compensation. While we aim to feature some of the best products available, we cannot review every product on the market.

Is credit card travel insurance any good? - Times Money Mentor (2024)

FAQs

Is credit card travel insurance any good? - Times Money Mentor? ›

However, paying by credit card offers a good chance of financial compensation if your trip doesn't go ahead as planned. In some cases it may be better to make a refund claim through your card provider, rather than through your insurer.

Does credit card travel insurance really work? ›

If you purchase your trip with a credit card that offers travel accident insurance, you may be covered for certain situations, such as accidental death or dismemberment, or a loss of speech, sight or hearing, experienced while on a common carrier (air, bus, train or cruise transportation) or during a covered trip.

Is credit card insurance worth it? ›

The benefit of insuring your credit card balance is that if job loss, total disability, or loss of life occurs, your finances may be protected to a greater degree. Credit card balance protection insurance can help you make payments on your credit card if you, for example, lose your job.

Does a credit card count as travel insurance? ›

Some credit cards come with included international travel insurance, which can be very handy when holiday time comes around. There are no guarantees when you travel, but having travel insurance can help you be prepared should something unexpected happen.

What is the best international travel insurance for seniors? ›

Compare Travel Insurance Companies for Seniors
CompanyBBB RatingRecommended Plan
Travelex GET QUOTEA+Travel Select
Berkshire Hathaway Travel Protection GET QUOTEA+LuxuryCare®
Nationwide Travel Insurance GET QUOTEA+Luxury Cruise
Generali Global Assistance GET QUOTEA+Premium
5 more rows
Apr 16, 2024

What are two disadvantages of travel insurance? ›

It can also be expensive, difficult to file claims, and not always cover the things you thought it would — or should.

Is credit card travel insurance better than regular travel insurance? ›

In most instances, traditional travel insurance policies will have more comprehensive coverage than credit card travel insurance. They'll cover more reasons for trip cancellation, and some may cover cancellations for no reason. They'll also cover medical emergencies, while credit card travel protections don't.

What is covered by credit card insurance? ›

What protection do I have on my credit card purchases? If you buy something with your credit card and the item is faulty, broken, or never arrives, you have the right to claim the costs back through your credit card provider.

What is covered under credit card insurance? ›

Credit Card Protection Insurance is a type of coverage that protects your credit card purchases in the event of death, medical disability or unemployment. It can also cover any damaged items that you've purchased with your credit card.

Why don t you need credit card insurance? ›

Given that federal law limits credit card fraud liability and that most credit cards offer a “Zero Liability” policy, credit card loss protection insurance doesn't offer any additional benefits. Not only is it unnecessary, it's also a waste of money. Why pay extra for something that's already been provided for you?

What is not covered by travel insurance? ›

Reasonably foreseeable events. Known storms, epidemics, acts of war. Travel restrictions imposed by government authorities. Pre-existing conditions, unless the Premium plan is bought within the window for coverage.

Does your credit card cover trip cancellation? ›

To be covered by your credit card 's Trip Cancellation/Trip Interruption Insurance, you must have paid in full for the trip with your credit card ((except for certain cards such as the National Bank's World Elite Mastercard®, which requires partial payment, or the Scotiabank Gold American Express® Card, which requires ...

Do all Visa cards have travel insurance? ›

Holders of Visa Platinum, Visa Signature, Visa Infinite, Visa Platinum Business and Visa Signature Business premium cards will be automatically insured when traveling.

What travel insurance company is the best? ›

Our Rankings of the Best Travel Insurance Companies of 2024
  • Faye: Our top pick.
  • Travelex Insurance: Our pick for families.
  • Nationwide Travel Insurance: Our pick for cruise travel.
  • Tin Leg Travel Insurance: Our pick for customizable coverage.
  • Berkshire Hathaway Travel Protection: Our pick for luxury travelers.
Apr 19, 2024

Who is the best and cheapest travel insurance? ›

The 7 Best Cheap Travel Insurance Companies Worth The Cost
CompanyBBB RatingCheapest Plan
Travelex Compare PlansA+Travel basic
Seven Corners Travel Insurance Compare PlansA+Trip Protection Basic
Generali Global Assistance Compare PlansA+Standard Plan
AIG Travel Guard Compare PlansA+Essential
3 more rows
Apr 23, 2024

Is it better to buy travel insurance early or late? ›

In general, you can buy coverage any time before the date of your trip. That said, it's always best to buy coverage as soon as you make your reservations. The sooner you buy travel insurance, the sooner you'll be protected and the more benefits you may be eligible to receive.

What does credit card travel insurance cover? ›

Trip interruption or cancellation: These coverages protect you if your travels are interrupted or canceled for a covered reason, such as an illness or severe weather. Trip delays: Trip delay insurance protects you if your flight is delayed for a covered reason and you must pay for meals or lodging.

Does travel insurance really pay? ›

If your trip is canceled for a covered reason, a policy will often reimburse airline tickets, hotel rooms, rental cars, tours, cruises and other prepaid, non-refundable expenses.

Do credit cards cover trip cancellation? ›

Your credit card's trip cancellation insurance may reimburse you for prepaid flights and hotel stays booked with your credit card. Trip interruption insurance (for trips that end earlier than planned) may cover expenses like the cost of a last-minute flight home.

Do travel insurance companies actually pay out? ›

Travel insurance compensates you for money you lose due to unforeseen events before and during your trip. Just as importantly, it can pay for emergency medical care and evacuation during your trip.

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