Is the travel insurance on my credit card good enough?

Credit cards that come with complimentary travel insurance can be both a blessing and a curse.

You might read that and wonder how on earth something that is available for free could be seen as anything other than a blessing. It's a fair question to ask. After all, if someone wasn't the biggest fan of a credit card's insurance benefits, they could just go and buy them from somewhere else, right?

Knowing your credit card includes travel insurance and knowing how much it includes are two completely different things. It's very easy to fall into the trap of assuming that everything is going to be covered—and it's a dangerous mistake to make.

What you need to do is determine your requirements and then check the degree to which they are covered by your credit card. And to do that, you'll need to know what constitutes 'good enough.'

What makes coverage good enough?

Seasoned travellers will be able to answer this with little hesitation. But for newbies, there's a bit of a learning curve, so we'll keep things simple.

Critical travel insurance benefits fall into two basic categories: medical coverage and loss/cancellation coverage. These are the core entities that all travellers should account for unconditionally.

Travelling without medical coverage is like driving with new brakes that haven't been market approved; it might not end up being that big of an issue, but there's also a decent chance it could be catastrophic. Even the most risk-averse of travellers can find themselves in situations where they require serious medical attention while abroad. And without emergency medical coverage, they'll be at the mercy of a foreign system that will not be nearly as benevolent as the Canadian system (for non-citizens, at least).

While health is apparently a higher priority than possessions and trip bookings from a life perspective, the money you could lose out on by not securing coverage for them is comparable to what you might be spending if you're uninsured and in a foreign hospital. Having to cancel flights, accommodations, and events could theoretically rack up thousands of dollars in sunk costs. Getting trip cancellation insurance is the first thing someone should do after booking.

Do credit cards provide satisfactory coverage?

Now that we've established a benchmark for what 'good enough' coverage is, we can tackle the question you came for: Is the travel insurance on my credit card good enough?

It might be. Many travel credit cards—particularly the ones with extravagantly high annual fees—will include all the travel insurance goods. There may be restrictions of sorts (e.g. the trips cannot exceed 21 days), but it's certainly possible that a high-end credit card could cover both emergency medical expenses and trip cancellation/baggage loss.

Unfortunately, though, the more likely scenario is that it offers neither of them. Remember, these are travel credit cards, not travel insurance credit cards. Travel insurance is just one perk among many. Usually, it's reward points that serve as the sweetest incentive in the deal. If a credit card does come with travel insurance benefits, it may only have less essential ones like international driving coverage which is often tied to a deal with a specific car rental company.

This can be frustrating if you've been assuming that more would be included, but it's just the way it is sometimes. If this means you're now looking for supplementary insurance—or a new package altogether—then we've got you covered.