Issuers of credit cards with included travel insurance have been compelled to provide more substantial information regarding the cover conditions and benefits of their credit card travel insurance products.
These provisions follow an ASIC review of 17 credit card brands and their associated insurers, which was made following complaints from the general public and disputes data published by the Financial Ombudsman Service (FOS).
Complaints were in regard to a lack of clarity in regard to the scope of coverage provided and eligibility requirements.
The review has resulted in credit card issuers and their insurers agreeing to make the following clarifications:
- the activation date of insurance cover, particularly for ‘minimum spend’ thresholds
- if using reward points to pay for travel costs will activate cover
- whether supplementary card holds benefit from the policy
- more information about documentation required to make claims
Credit card issues have been required to make terms and conditions more easily accessible, and take efforts to ensure that the difference between standalone and credit card travel insurance is clear to potential policyholders.
These amendments aim to ensure that consumers are not exposed to loss due to relying on the wrong travel cover.
“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,” says ASIC Deputy Chairman Peter Kell.
‘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 what is not covered by a policy, so that consumers can work out if they are adequately covered.’