I didn't get travel insurance. Instead, I got a credit card.

Maybe some of you read this and think, "Duh, Maria! We've known about this for a long time already! Can't believe you didn't know it worked like that."

And if you do, I suggest you don't read any further :)

But if you don't - the way I didn't, up until I started booking our European plane tickets this week - then read on. Knowing it may come in handy.

So: this week I went through the rigmarole of booking Christchurch-London-Christchurch plane tickets for our family of four. The undertaking was... massive.

I mean, seriously: I've booked a fair amount of flights during my years of being single or at least childless, and never did I think that doing it for a whole family would be so different.

One: we are travelling on two separate planes - The Man takes one kid, I take another.
Two: between us we have three different citizenships.
Three: both me and The Kid have a list of medical conditions which puts our travel and health insurances at a premium.
Four: we are going with an early, early, early bird fares to a point that some airlines haven't even RELEASED tickets to as far as we are booking them into (so the airline is basically giving us an option of buying tickets now and then, without charge, changing them to a later date once the later date is released).

But nevertheless: we've done it. This morning $6,734 left our bank account and we have, officially, booked tickets to go to Europe next year!

But there's a nifty little trick I learned in the process, and that is, namely, that some credit cards come with complimentary (international) travel insurance, which means that on this occasion we 1) did not get (separate) travel insurance and, instead, got a 2) credit card which will provide us with just that.

And it's cheaper.

***

It's been eight years since I've last had a credit card. I had one when I first came to New Zealand because it allowed me access to significant "emergency funds", but since I paid that off in 2010 I haven't had one.

Me and The Man don't use credit cards. We have an agreed-upon amount of money sitting in our bank account each day and whenever we manage to save above that amount, the excess gets squirreled away into a savings account. The upside is that savings account earns us interest - but downside is, whenever we have a large purchase looming we need to plan ahead and ask the bank to release funds from our savings account, because savings accounts have notice periods.

Which means that normally, we don't have enough money to just go and, you know, buy plane tickets to Europe!

Which is where the credit card comes into play.

Last week I noticed that Flight Centre was holding a sale for Christchurch-London-Christchurch tickets at $1,799. It's a... pretty good deal, especially given that it's a combination of Virgin Atlantic and Air New Zealand, both high-quality customer service airlines, with short layovers only in Auckland and then Shanghai.

But we didn't have money to just go and buy the tickets outright, and we didn't have time to wait.

So we looked into getting a credit card temporarily, so we could buy the tickets and then pay the credit card off again. I was on the phone to Kiwibank planning to get one of their low-fee cards when the man on the phone said that the most expensive one, what they call Airpoints Platinum comes with travel insurance and I was, like, "Wait, what? Comes with travel insurance? As in, for free?"

"Yes."

"Travel insurance. What kind?"

The man started explaining and at that point my two-hour back-to-back phone marathon with our bank, our insurance company and our travel company started, the result of which is that I now have plane tickets and insurance at a price that is better than if I'd gone for just travel insurance on its own.

***

The story is, basically, pretty simple. Every holder of a Kiwibank Airpoints Platinum credit card gets 40 days of travel insurance coverage for free and therefore the cost on our end was the annual fee of the credit card itself, $180.

Paying with a credit card did mean that we had to pay a 2% credit card fee (so the tickets cost us $6,734 instead of $6,602) but even with the $132 credit card fee the total was still cheaper than getting travel insurance on its own: $180+$132=$312 compared to $434 which was our independent travel insurance quote.

Flight Centre did caution me to check what the terms and conditions were exactly, because apparently there have been cases where "credit card insurance" kicks in only 3 days before departure and therefore, if one of us broke their leg and was hospitalised, unable to fly, we wouldn't be insured if it happened more than 3 days prior to departure.

But no - in our case all was well. The company who offers insurance through Kiwibank is Tower Insurance and their coverage kicks in from the moment I use the credit card, so buying the plane tickets started our insurance coverage. And it isn't some sort of a skinned back, "light" version of insurance, either - it's standard terms and conditions.

I then even spent an hour on the phone with Tower Insurance's medical team clearing the list of mine and The Kid's medical conditions. For $50 each, both me and The Kid are covered to the full extent, so that if something happens that is, say, connected to my epilepsy - I am still going to be covered. It's not excluded from the insurance contract.

***

And then the last thing, the credit card earns us Air New Zealand airpoints which we can put towards getting our plane tickets from Invercargill to Christchurch later in the year.

This $6,734 purchase, for example, earned us an equivalent of $90 that we can put towards Invercargill plane tickets. (In addition to the fact that our 'usual' bank card is already connected to airpoints so that buying groceries, for example, is also slowly earning us airpoints.)

***

And that is, basically, how we ended up getting a credit card instead of travel insurance.

PS. Did you know of this option previously?

3 comments:

  1. Mmmm yes. It's pretty common although you've gone through some serious research and number crunching to make sure that financially and otherwise everything is sound. :)

    Can you let me know if and when you may happen to come by London / UK way? Would be fun to see you after what... 10 years? :D

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    1. Meilisin sulle eile õhtul. Said kätte?

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