ASIC review prompts changes to credit card travel insurance disclosure

Consumers using travel insurance provided by their card issuers will soon have a better understanding of when the cover is activated, who is covered and claims procedures.

Credit card issuers and insurers have made improvements to disclosure relating to travel insurance provided through credit cards, following a review by the Australian Securities and Investments Commission.

ASIC said it followed up on complaints it had received and also complaints lodged with the Financial Ombudsman Service. There was uncertainty about who was covered by the policy, the extent of exclusions and eligibility requirements.

Changes that card issuers and their insurers will make include: clarification of when the cover is activated, particularly where a minimum spend threshold needs to be met; clarification of whether the use of reward points for travel costs will activate the cover; and whether supplementary cardholders can benefit from the cover.

Issuers and insurers will also provide clearer and more prominent information about the documentation needed to make a claim, and make it easier to locate insurance policy terms and conditions on their websites.

ASIC deputy chairman Peter Kell said in a statement: "Having travel insurance is essential for those heading off on an overseas trip. Credit card issuers and insurers must clearly set out what is and is not covered by a policy, so that consumers can work out if they are adequately covered."