Credit card travel insurance disclosure is set to change following an ASIC review conducted across 17 credit card brands, including the big four Australian banks. The review has prompted credit card issuers (CCIs) and insurers to respond, dealing with complaints centred on coverage eligibility and exclusion uncertainties.
At present, credit card travel insurance is often bundled as a ‘complimentary’ feature for card holders. The changes aim to strengthen consumer awareness, providing direct links to insurance policy terms and conditions via the website. CCIs and insurers will also respond to the review by clarifying:
- ‘activation’ of insurance cover, particularly minimum spend thresholds;
- circumstances in which the use of reward points for travel purposes will activate insurance cover;
- whether supplementary cardholders may benefit from the policy; and
- providing clear information with respect to documentation requirements for making a claim.
ASIC has welcomed the changes, with Deputy Chairman Peter Kell stating that ‘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’. These changes should also assist the CCIs because it will hopefully reduce the number of complaints they receive from consumers.
The changes are consistent with ASIC’s focus on improving consumer’s understanding of financial products and how the products operate.
For more information, click here to view ASIC’s media release.