What does free travel accident insurance cover?

Travel accident insurance has long been on credit card providers' rosta of 'extras'.

A number of cards offer it for free and without opt-in when cardholders pay for a trip using their credit card.

Unfortunately, in this case, credit card holders are getting what they pay for: travel accident insurance is far from a substitute for full comprehensive travel insurance.

So who offers full travel insurance?

Full travel insurance is available through credit card providers but it's much more rare. In general, credit card holders with full travel insurance will know they've got it because they'll be paying out for the policy in the form of an annual fee for holding the card.

Currently two of the main deals to offer fully comprehensive travel insurance policies are Sainsbury's Bank Gold credit card [click through for cost of credit] and all Barclaycard credit cards [click through to see individual deals and their cost of credit].

In the case of Sainsbury's Gold cardholders pay a £5 monthly fee in return for a "packaged" offer of an annual worldwide family travel insurance policy.

For Barclaycard holders it's a little bit different, there is no specific fee to pay, but to get the cover cardholders must book a trip through the Barclaycard Travel Service - so the cover is restricted to loyalty.

What does travel accident insurance actually cover?

Travel accident insurance differs from normal travel insurance in that it usually only covers extremely serious bodily injuries and fatalities whilst travelling.

Every policy is different but, in general, the policies cover the cardholder and, sometimes, selected members of the party they're travelling with, in the event of:

• death
• loss of limbs or sight
• accidents which lead to permanent disability

As with all insurance policies, exclusions abound although, in the case of travel accident insurance, exclusions seem even more frequent than with other insurance policies.

For example, most policies only cover transport accidents in the event that the ticket to travel was specifically paid for with the credit card.

Most importantly of all, unlike full travel insurance, much more common travel problems - loss of luggage, say, or transport delays - aren't covered.

Additionally, and somewhat more importantly, less 'serious' medical problems, such as getting ill abroad and needing hospital treatment for example, wouldn't be covered either.

Adequate cover

So, if travel accident insurance doesn't cut it, what does?

The 'right' policy will be dependent on individual circumstances - that is, the type of trip the policyholder is going to take as well as several other factors including age, how many trips will be taken throughout the year and where there are any pre-existing medical conditions.

For example, many travel insurance policies still take it as read that the policy holder has booked a package holiday: the flight and accommodation all with one provider.

That means that those who book flights and accommodation separately are often not covered for the indirect losses they will suffer if one part of the journey goes wrong.

Section 75

Credit card holders looking into travel insurance should also note that no policy invalidates the protection offered to those paying by credit card under law.

Section 75 of the Consumer Credit Act states that credit card providers are equally liable - with retailers or service providers - for offering redress when an item or service is faulty, mis-represented or not delivered at all.

For travellers this has proved invaluable: many have got refunds on flights where the airline has gone bust.

However, even Section 75 is no substitute for a full travel insurance policy.

Final word

Whether looking into travel accident insurance or full travel insurance, the core advice remains the same: check terms and conditions in full before relying on a policy so that you know exactly what is and isn't covered before you need to rely on it.

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