A detached retina four weeks before a Japan tour left one Australian couple $12,000 out of pocket. The cover that could have paid the bill was on their credit card – they just hadn’t switched it on.

Melbourne woman Sue O’Callaghan, 61, and her partner had paid $17,000 for a 14-day tour of Japan, and were due to depart in mid October.

About a month before, O’Callaghan needed emergency surgery for a detached retina. A gas bubble in her eye meant she was banned from driving or flying for six weeks.

The couple had paid for everything – tour and flights – on their CommBank Ultimate Awards credit card.

It came with complimentary travel insurance, including cancellation cover with no overall limit. But they hadn’t activated it. Like many travellers, they usually switched it on the week before leaving. When they called the bank, they were told they had no policy number.

“We spoke to someone about activation, and they said you can’t backdate it,” O’Callaghan said.

Their story comes as Australia’s big banks reshape the complimentary credit card travel insurance many cardholders rely on.

Changes to CommBank cards took effect on September 29, and new Westpac and Bankwest policies began on October 1. ANZ Rewards Platinum loses its travel insurance from December 9, and ANZ Rewards Black from March 24. NAB cut or reduced cover on some of its cards in May.

Why you need to activate credit card travel insurance

CommBank says Ultimate cardholders must meet two requirements: Spend at least $500 in a single transaction on an eligible card and activate the cover before travelling. Cancellation cover starts only once both are complete. Medical and baggage cover start from the departure date.

O’Callaghan met the first requirement when she paid. The second never happened, so when her retina detached, the couple had no cancellation cover to claim on.

Cardholders can activate up to 12 months before departure, through the CommBank app or by calling XCover, the bank’s insurer since late September. CommBank says NetBank activation is planned.

The change of insurer didn’t change the rules, or the Ultimate card’s unlimited cancellation benefit, which has a $500 excess.

The activation date matters for medical conditions, too. CommBank said it helped determine whether a condition counted as pre-existing – one more reason to do it early.

CommBank executive general manager of consumer finance Joel Larsen said activation was the key step.

“Customers can activate up to 12 months before departure, so we encourage them to do this when they’re planning their trip and check the cover available to them,” he said.

Cancellation is no fringe risk. Cancellation fees and lost deposits made up 27 per cent of the more than 4000 claims RACV Travel Insurance received in the 2026 financial year, second only to overseas medical claims at 37 per cent.

“What was included a year ago may not be included today, and some policies require travellers to activate cover or meet spending thresholds before they’re eligible,” RACV travel insurance manager Judith Gamble said.

Activate your credit card travel insurance when you book. Photo: Canva

The second problem

The couple also had a $770 standalone Cover-More policy, but with a $5000 cancellation limit – less than a third of the tour price.

O’Callaghan said they were more worried about something going wrong while they were away than having to cancel.

“We were both fit and healthy,” she said.

That limit could have been raised.

“In many cases, customers can change their cancellation cover after purchasing a policy by contacting Cover-More, provided this is done before their trip begins and before they become aware of any circumstances that could reasonably result in a claim,” a Cover-More spokesperson said.

“Cover-More also offers Cancellation Plus Cover, an optional add-on with Comprehensive and Comprehensive+ plans, which may provide extra cancellation cover for reasons not ordinarily covered, such as change of mind, unapproved leave from work or unexpected expenses.

“Every trip is unique, so travellers should consider all non-refundable prepaid costs in case they have to cancel. This may include flights, accommodation, tours and transport for everyone covered under the policy.”

The couple had two chances to close the gap before her health emergency: Activate the card cover, or raise the Cover-More limit. A higher limit would have meant a higher premium, but the cost of either step was small next to the tour price.

They are still working through a Cover-More claim and possible credit for their flights, so their final loss isn’t yet known. On the tour alone, the gap between what they paid and their cancellation limit is $12,000, before any excess.

Has your credit card travel insurance changed?

Online comparison service Compare Club surveyed 1000 credit card-holders in September.

Just over half (51.3 per cent) had not checked whether their own card’s travel insurance had changed, and 30 per cent didn’t know banks were cutting or removing cover at all.

Compare Club estimates around three million Australians have rewards credit cards with complimentary travel insurance, meaning up to 900,000 cardholders may be unaware the changes are happening.

“This is not something to leave until check-in,” Compare Club research boss Kate Browne said.

It’s also important to understand that who is covered matters as much as when.

“Insurance through your credit card may only cover the cardholder (not your spouse, children, or additional cardholders). Generally, it will only cover you for the trip you have paid for on your credit card,” an Australian Securities and Investments Commission spokesperson said.

The couple had booked a 14-day tour of Japan. Photo: Getty

What to check to avoid a costly mistake

• Activate credit card travel insurance when you book: On cards like O’Callaghan’s, cancellation cover starts only once you’ve met the spend and activation requirements.
• Read your credit card’s current policy: Some cards have dropped cancellation cover entirely for new trips. Check the effective date against your booking.
• Check who’s included: Partners and children may not be covered unless the policy says so.
• Match cancellation cover to what you’ve prepaid: Set any standalone cancellation limit to cover non-refundable flights, accommodation and tours for everyone on the policy.
• Know your operator’s cancellation tiers: Fees often climb sharply inside 70 days and hit 100 per cent close to departure. Many policies let you raise cancellation cover before the trip starts, but not once you know of something that could lead to a claim.

The verdict

Complimentary credit card insurance is a backup, not a plan. Banks can change it, it may not cover everyone you travel with, and on some cards, cover doesn’t exist until you switch it on.

O’Callaghan and her partner had two policies, and neither was set up for the one thing that went wrong. The catch is timing: Once something has happened, it’s too late for either.

So do it the day you pay the deposit. Activate your credit card cover, add up everything you can’t get back, and make sure your cancellation limit matches it.

Republished from International Traveller