CREDIT Card issuers will provide clearer information on credit card travel insurance after an ASIC review was triggered by public complaints and disputes data published by the Financial Industry Ombudsman.
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Card issuers will now clarify when the insurance cover is activated, particularly where there is a minimum spend threshold; if the use of reward points to pay for travel will activate cover, and whether supplementary cardholders can benefit from the policy.
They will also provide clearer and more prominent information about documentation needed to make a claim, and include direct links to terms and conditions on websites.
Credit card travel insurance is usually available with premium credit cards that offer extra benefits with the card. It requires a minimum spend on the card for cover to be activated.
Of the policies reviewed, more than half required the full airfare for travel to be paid on the credit card, while less than half required a minimum spend of $250-$1000 of prepaid travel costs on the card, such as travel ticket or accommodation costs.
ASIC deputy chair Peter Kell said credit card issuers that also distributed stand-alone travel insurance had agreed to more clearly distinguish the stand-alone policy from the credit card policy, so consumers were properly informed.
“As travel insurance may not be at the forefront of the consumer’s mind when obtaining a credit card, improved disclosure will help consumers understand and claim,” he said.
“Having travel insurance is essential for those heading on an overseas trip, to provide cover for when things go wrong.
“Credit card issuers and insurers must clearly set out what is and is not covered by a policy so consumers can work out if they are adequately covered.”
