As a result of pressure from the Australian Securities and Investments Commission (ASIC), a range of banks and credit card issuers nationwide have been forced to better disclose the terms and conditions of Travel Insurance policies marketed through rewards schemes.
An increase in consumer complaints to the Financial Services Ombudsman regarding the terms of credit card travel insurance prompted ASIC’s investigation into the problem. The complaints included uncertainty around who was covered by the policy, as well as the extent of exclusions and eligibility requirements.
Upon investigation of 17 credit card companies, ASIC found that many cardholders were not entitled to Travel Insurance as a result of specific exclusions and eligibility criteria. Several cardholders were therefore left out of pocket as a result of accumulated travelling expenses that they had originally assumed they were covered for by their credit card policy.
The investigation found that many of these cardholders were exempt from Travel Insurance cover under certain circumstances:
- Cover was denied if cardholders did not meet monthly spending thresholds
- Cover was limited to only one person, so supplementary cardholders were not protected by the policy
- Cover was denied to some cardholders if they used their rewards points to pay for the cost of travel
ASIC found that in many cases, these terms and conditions were not clearly stated by the financial institutions. Several institutions failed to provide this information on their website, or direct links to it from their website, resulting in confusion amongst credit cardholders.
Organising the right Travel Insurance policy is an essential part of preparing for your trip. If you are uninsured or have inadequate cover, you (or your family) can be personally responsible for covering any medical or other costs resulting from unexpected incidents or accidents.
You should make sure your Travel Insurance covers all medical expenses for injury or illness, as well as theft of valuables, damage to baggage and cancellations or interruptions to flight plans. Accidents can happen to anyone, and medical costs overseas can reach hundreds of thousands of dollars.
We can provide advice to help you make sense of a range of Travel Insurance and Corporate Travel policies and source the most appropriate cover for your personal or business needs.
Speak to us about adding Travel Insurance to your policy today.
Conditions apply for each policy and the information expected from you for a policy to trigger. Coverage may differ based on specific clauses in individual policies. Please ask your broker to explain the additional benefits and exclusions pertaining to your policy.
The information provided is general advice only and does not take account of your personal circumstances or needs. Please refer to our financial services guide which contains details of our services and how we are remunerated.