Why Credit Card Travel Insurance may be Overrated

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I love credit cards with travel insurance. They provide you with a tangible benefit that can save you hundreds of dollars year, but here’s the thing, credit card travel insurance may be overrated.

To be clear, when I say credit card travel insurance is overrated, I’m referring to travel medical insurance, not travel insurance such as trip cancellation, lost luggage, hotel/motel burglary, etc. which are well worth it.

Even though travel medical insurance is provided without having to charge your travel expenses to your credit card, I’d still never rely on that insurance alone if I ever had to make a claim, Here’s why I believe credit card travel insurance is overrated.

It may not cover you or your entire trip

The most annoying thing about travel insurance is that it can sometimes be limited. For example, the American Express Platinum Card is one of the best travel credit cards in Canada, but the travel medical insurance only covers you for 15 days if you’re 65 and under.

Yes, I realize you can pay to extend your coverage, but that doesn’t help people who are 65 or older. If you fall into that 65+ range, you’d have to get a credit card such as the Scotiabank Passport Visa Infinite, but that only gives you 10 days of coverage.

There’s a good chance that of the best credit cards with travel insurance will provide you with enough coverage you need, but that specific card may not line up with your spending so you’d only be holding it for travel insurance purposes. 

Although the value of travel insurance is usually more than the annual fee that you’re paying to hold the credit card, you could still end up paying more to get the coverage you need. Seniors are often better off just buying an annual policy that covers multiple trips directly from an insurance provider.

The underwriting process may deny your claim

Even if you’re satisfied with the travel medical insurance that comes with your credit card, the underwriting process may end up costing you since it’s done at the time of the claim.

Let’s say you have chest pains while abroad and you need to go to the hospital. You call your insurance provider and they approve the costs so you get all the tests done. You get billed and assume your provider will take care of everything.

During your insurance provider’s due diligence, they find out that you went to your regular doctor a month ago and complained about indigestion. They could consider this a pre-existing condition and deny you your claim. I’m generalizing here, but the point is when the unwriting process is done can make a huge difference.

Now let’s say you decide to purchase a separate policy from a travel insurance provider. The underwriting is done at the time of the application. Before you get your insurance, they’ll ask you things such as your age, the length of your trip, where you’re going, if you have any pre-existing medical conditions, if you’ll doing any extreme sports, etc. 

Most of the time this is a simple process, but there may be times where you may require a few extra steps such as completing a medical questionnaire. As long as you’re truthful, the insurance provider can create a policy that fits your needs. Even if you have a pre-existing condition, you could still be covered. If a new health issue comes up and you plan on travelling, be sure to check with your insurance provider.

As you can see, with separate travel insurance policies, it’s pretty clear what you’re covered for. You can also choose the length of your coverage and find a provider that will cover you if you’re 65+. I’m pretty sure you’re starting to see why I think credit card travel insurance is overrated.

You may already have travel insurance

What many people don’t realize is that they may already have travel insurance. Most employers who offer health benefits typically include travel medical insurance too. As you can imagine, every policy is different, but they’re usually pretty good and pre-existing conditions are often covered.

I understand that not everyone is fortunate to work for an employer that gives these kinds of benefits, but I think it’s fair to say that many people do. Always read up on your employer benefits to find out what you’re covered for. 

Although your human resources department may be quite knowledgeable, I recommend contacting your insurance provider directly to find out exactly what you’re covered for.

When credit card travel insurance makes sense

Again, I want to make it clear that I only think travel medical insurance is overrated when it comes to credit card travel insurance. If your credit card comes with a comprehensive travel insurance package, then you may have the following insurance included:

  • Trip cancellation 
  • Trip interruption 
  • Flight/trip delay 
  • Delayed and lost baggage
  • Auto rental collision/loss damage
  • Hotel/motel burglary 
  • Common carrier travel accident

All of these travel insurance benefits have their uses and are always worth it. I personally never travel without trip cancellation/interruption or delayed and lost baggage insurance. These types of insurance can absolutely save you during a trip.

Unlike travel medical insurance, these additional types of travel insurance don’t automatically apply just because you have a credit card that includes travel insurance. In most cases, you need to charge a set percentage of your travel expenses to your credit card for it to be valid. 

That percentage could be 75% or 100%. So if you wanted your trip cancellation to be valid, you may need to charge 100% of your flights and hotels to your credit card. That said, the BMO World Elite Mastercard allows you to charge any amount of your travel expenses to your credit card for your travel insurance to be valid. That means you could charge just $1 of your applicable travel expenses, and you’d be covered. 

Travel insurance may not cover everything

Although I think it’s important to have trip cancellation insurance and how vital it is for travellers, you need to understand that trip cancellation doesn’t cover everything.

You can’t simply cancel your vacation because you want to, if there’s a pandemic, or if there’s an act of God. Your insurance policy clearly defines what counts as a qualifying reasons and often, the airline refund policy applies first.

For example, let’s say you need to cancel a flight due to a qualifying reason, but your airline issues you a credit that’s good for 12 months. You wouldn’t be able to make an insurance claim since you would be double-dipping. Once that credit expires, you’d likely be able to make a claim, but you would have needed to start the claim process early as there are usually strict conditions.

Final thoughts

I personally never rely on my credit card travel insurance for anything travel medical related. If you ever need to make a claim, using your employee health benefits or the travel medical insurance package you purchased will typically give you better coverage.

Why Credit Card Travel Insurance may be Overrated

About Barry Choi

Barry Choi is a Toronto-based personal finance and travel expert who frequently makes media appearances. His blog Money We Have is one of Canada’s most trusted sources when it comes to money and travel. You can find him on Twitter:@barrychoi


  1. Deborah S on May 31, 2020 at 7:58 AM

    I think that credit card travel medical coverage can be useful for day trips across the border, especially for retirees and others without employee health benefits. Underwriting restrictions will come into play with ANY private policy.

  2. Not A Scotiabank Fan Anymore on January 30, 2022 at 7:22 PM

    Tried Scotiabank Passport Visa. The client experiencein obtain the card was ABYSMAL. I sent it back, yes it was that bad.

    Do yourself a favour, even if you are over 65, save yourself Rhett pain and get your Visa elsewhere, unless you are already aBNS customer (which may lower the pain threshold)

    As an aside, if you think Scene+ has value, you’re likely won’t. Read app review comments. Ppl haven’t gotten access for months!! Like me, they wasted hours trying!

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