Travel agents take aim at banks’ ‘Mickey Mouse’ insurance deals

Travel agents have slammed banks over free travel insurance policies offering no terrorism cover.

AFTA boss Jayson Westbury regards free travel insurance provided with banks’ premium credit cards as “a lowball Mickey Mouse product”. Picture: News Corp

The Australian Federation of Travel Agents has slammed banks and financial institutions over free travel insurance policies that offer no terrorism cover, ­accusing them of issuing “Mickey Mouse” policies that expose their best credit-card customers to huge financial risk.

The tough words from AFTA boss Jayson Westbury came as four more financial institutions — international financial giants American Express and HSBC, as well as the Bendigo and Heritage banks — caved in to pressure in the wake of this week’s investigation by The Australian, and started reviews of the terror cover for their free insurance schemes.

The latest reviews mean 13 ­financial institutions that had previously offered little or no terror cover with their premium cards — including Westpac, and the Westpac-owned St George, Bank of Melbourne and Bank SA, as well as CBA-owned Bankwest, Citi, Suncorp, Bank of Queensland and Virgin Money — are now ­either reversing or reviewing their stances on terror cover.

However, Macquarie Group, which offers free travel insurance through its platinum and black credit-card products, had no comment.

Mr Westbury said that in general terms he regarded free travel insurance provided with banks’ premium credit cards as “a lowball Mickey Mouse product”.

Insurance Council of Australia spokesman Campbell Fuller conceded credit card travel insurance was “a fairly basic product”.

Mr Westbury called on bank executives to launch a full review of their free credit card insurance, both for terrorism and beyond.

He said he had learnt of the shortcomings of the credit card policies through personal experience of Australian terror victims who had relied on them. “I have become aware of Australians who have been caught up without ­appropriate cover,” he said.

“Now that this has been highlighted by recent tragic events, it is time for the bank executives to ­rethink the sorts of insurance they’re including with these credit cards. They also need to be more transparent with consumers.”

NSW Counter-Terrorism Minister David Elliott said on Monday that he was aware of people who had found themselves in “a vulnerable situation” because of inadequate credit card travel insurance.

Mr Westbury reserved some criticism for insurers. “It seems inconceivable that insurance companies, who make so much money out of travel insurance, peddle ­inferior products through bank credit cards,” he said. “They should be called to account. History has shown the number of terrorism events in the world are insignificant compared to the number of claims that go on for travel insurance. It should be standard cover.”

An Amex spokesman said it was working with its insurer Chubb: “We have to see how we can make any changes (to terror cover), and that can’t be done overnight.” Spokesmen for HSBC, Bendigo and Heritage revealed similar reviews. But a Macquarie spokeswoman said: “We don’t have anything to add.”