Free Travel Insurance from Credit Cards: Is It Any Good?

So far, we’ve talked about best credit cards that earn miles and lounge access. Now, we will dive into a new topic: travel insurance. How should we approach travel insurance as a savvy mileschaser?

In this post, we’ll check what Malaysian credit cards actually cover with their free insurance, and whether it’s enough for miles chasers like us.

Things You Should Know About Travel Insurance in Malaysia as a Mileschaser

Loss of Miles and Points Is Not Covered (But it’s ok)

Unfortunately, no insurance policies from major insurers in Malaysia cover miles and points. In Singapore, such coverage exists, but demand in Malaysia just isn’t strong enough.

That said, insuring your miles and points may not be all that necessary. As we’ve shared in our post on change and cancellation fees for frequent flyer programs, one of the big advantages of using miles is flexibility.

If you fall seriously ill and can’t travel the next day, you can usually change or cancel your booking by paying a reasonable fee. And in some cases, your insurance policy will even cover the cancellation fees.

How Much Does it Cost to Change Award Redemption Tickets?

You have to charge the full fare to your card to qualify for insurance (except with World Elite Mastercards, where you can pay with miles)

The rule of thumb is that free credit card insurance only applies if you charge the flight fare to that card, with the exception of World Elite Mastercards.

Yes, with World Elite Mastercards, you can redeem a flight with miles and still be covered by the credit card travel insurance. Simply pay with miles from a FFP offered by the respective card, and charge the surcharges and taxes to the card, and you are covered for the trip.

Trip Delay and Cancellation: Free Travel Insurance Provide Reimbursement and Not Compensation

One of the biggest turnoffs on any holiday is a delayed flight. You’re left stranded, frustrated, and sometimes stuck for hours or even days. You might think that you automatically get compensated X lump-sum amount if your flight is delayed for every X number of hours. Right?

The truth is, it depends on the policy. Some travel insurance pays on lump sum compensation basis, as a kind of consolation for your lost time.

But some reimburse what you actually spend on accommodation, meals, or transport. And when a flight is seriously delayed, the airline may already provide accommodation and meals, so the reimbursement might not make much difference.

Unfortunately, the free travel insurances from Malaysian credit cards work on a reimbursement basis. You have to produce receipts to claim. If you prefer lump-sum compensation, we recommend that you look for a separate paid insurance policy.

Free Travel Insurance Has Coverage Gaps and doesn’t Include Optional Benefits

Some policies don’t even cover trip cancellation or overseas medical. Just be aware of these gaps and assess what you really need. And if you want extras like car rental excess or higher-risk sports, you’ll have to go for a paid insurance plan.

With that, let’s break down the travel insurance offered by Malaysian credit cards.

Analysis of Free Travel Insurance from Credit Cards

Entry Level Cards

For the CIMB Travel Platinum, the free travel insurance provided by Berjaya Sompo offers suprisingly decent coverage for such a basic credit card. It doesn’t cover flight delays, but it does include major events like trip cancellation due to illness, overseas medical expenses, and trip curtailment.

For AmBank Enrich Visa Platinum, the insurance coverage is quite basic. It lacks overseas medical coverage, which may not be an issue if you already have other insurance policies that cover medical expenses abroad.

Mid Tier Cards

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The policies from AmBank Enrich VI, Maybank KrisFlyer Platinum, and UOB Visa Infinite all have noticeable coverage gaps. We wouldn’t recommend relying on them if you want solid protection. That said, if you don’t feel like paying for separate travel insurance, they’re still better than nothing. And if you’ll likely be charging your fare to these cards anyway, you can treat the coverage as a free side perk.

The UOB PRVI Miles Elite offers fairly decent coverage. If you’re not too fussy, it might be good enough for your needs. Still, always make sure to assess both your coverage requirements and the ringgit amount insured.

Premium Cards

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World Elite Mastercards like UOB Zenith, CIMB Travel World Elite, and Maybank WEMC are the only ones that allow you to pay with miles. They also offer the strongest coverage among credit cards, though like all cards, their trip delay benefit is reimbursement-basis and they don’t cover optional extras such as sports or car rentals.

For the CIMB Preferred Visa Infinite, we wouldn’t recommend relying on it at all. It doesn’t even cover trip delays.

As for the Maybank Platinum Charge, a card many seasoned miles chasers use to pay for flights, its policy has significant coverage gaps and isn’t one we’d recommend relying on. For such a premium card, it’s a shame that the coverage doesn’t even measure up to Etiqa’s basic paid version.

Conclusion

Overall, the policies from UOB PRVI Miles Elite and World Elite credit cards (UOB Zenith, CIMB TWE and Maybank WEMC) might be decent substitutes to paid insurance.

The way we see it: If you’re redeeming a flight using miles, you might as well charge the taxes and fees to the card to activate the coverage. Then you can decide if you still want to buy a separate policy.

For the other cards, consider the insurance as additional coverage on top of your paid policy. Or simply a better-than-nothing perk when you don’t feel like paying for insurance.

We hope this post gave you some useful insights into travel insurance. As always, do your own due diligence and assess your coverage needs carefully.

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See you in the next post!