A detached retina four weeks before a Japan tour left one couple $12,000 out of pocket. The cover that could have paid 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, flying out on 16 October. On Friday 18 September, Sue needed emergency surgery for a detached retina. A gas bubble in her eye meant no 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," Sue tells International Traveller.

Their story comes as Australia’s big banks reshape the complimentary credit card travel insurance many cardholders rely on. Changes to selected CommBank cards took effect on 29 September, and new Westpac and Bankwest policies began on 1 October. ANZ Rewards Platinum loses its travel insurance from 9 December, and ANZ Rewards Black from 24 March 2027. NAB cut or reduced cover on selected cards in May.

Why you need to activate your 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 only starts once both are complete. Medical and baggage cover start from the departure date.

Sue 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 new insurer since 29 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 carries a $500 excess.

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

Joel Larsen, executive general manager of consumer finance at CommBank, says activation is 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," Larsen says.

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," says Judith Gamble, RACV’s travel insurance manager.

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.

Sue says they were more worried about something going wrong while they were away, not about having to cancel. “We were both fit and healthy."

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 tells International Traveller.

“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."

So, the couple had two chances to close the gap before 18 September: activate the card cover, or lift 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.

The couple is still working through a Cover-More claim and a 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 cardholders in September. Just over half (51.3 per cent) had not checked whether their own credit 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 hold 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," says Kate Browne, Compare Club’s head of research.

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 (ASIC) spokesperson tells International Traveller.

What to check to avoid a costly mistake

Activate credit card travel insurance when you book

On cards like Sue’s, cancellation cover only starts 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.

Sue 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.