Credit card insurance not the best bet

Credit card companies promising free travel insurance for holidays booked with their card may be giving their customers a false sense of security and leaving them exposed when they are abroad. Unless you only want cover in case of serious illness, death or permanent total disablement, it's a good idea to read the fine print of any policy you buy and shop around to find the maximum coverage for the best price.

Although many credit cards offer travel accident insurance for holidays booked with the credit card, it pays to check with the company what exactly is covered. In many cases, falling ill while travelling is not considered an accident. In other policies only accidents which occur while getting to, travelling on or getting out of a plane, train, or boat paid for in entirety with the credit card. In a lot of cases this kind of insurance leaves travellers unprotected the moment they step out of the airport at their holiday destination.

Some premium credit cards offer more comprehensive Travel insurance although it may not turn out to be quite as cheap as you expected. In most cases, in order to qualify, the entire vacation must be booked with the credit card and an annual fee is generally levied. Given that the nature of the insurance is often quite limited, the cost often outweighs the benefits.

Michelle Slade of Moneyfacts, a financial information provider, recommended that people take a careful look at the costs involved in free insurance provided by credit card companies. "You may find that if you shop around for your holiday and buy standalone travel insurance, it could work out cheaper," she said.

Brian Brown who works for Defaqto, a financial research company explained: "If you get sick, that's not an accident, so you're not covered. If the accident is caused by your bad heart, you're not covered. If you fall over on the beach once you've reached your destination, you're not covered. In all honesty the cover is usually so pathetic it isn't worth thinking of."

Instead, Brown, and other travel industry professions recommend that travellers read the fine print, ask a lot of questions and shop around before settling on an insurance policy.

Although everyones needs are different, ideally for travel in Europe, travellers should have at least £2 million in medical coverage and travellers to North America, particularly the United States, should consider increasing that amount. Every travel insurance policy worth its salt should cover repatriation, returning you or your body to your home country in the event of serious illness or death.

It goes without saying that cancellation insurance is a must. If the cancellation insurance isn't enough to cover the amount you spent on the holiday, it's hardly worth it. If your holiday is cancelled or interrupted, you want to be able to get reimbursed.

A good policy will also include around £2 million in personal liability insurance which protects you in the event that you should accidentally hurt someone or damage something.

Before buying travel insurance it pays to read your home contents insurance policy. If it doesn't cover all risks, you may need additional coverage to protect you in case your bags are lost or your luggage is damaged or stolen.

Since many credit card insurance schemes provide insufficient coverage or come at a high cost, it pays to phone around and talk to some insurance professionals before setting out on your next vacation. In addition to getting a good idea of prices, most insurance agents are happy to answer any questions you might have about coverage and help you chose the best option for you and your family.


Follow these links to find out more or to get a quote on Travel insurance, UK airport parking, UK airport hotels or UK airport lounges.



Jennifer Jones Editorial


10/07/2007


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