Your credit card could cover you from terror attack

The kin of those killed in terrorist attacks such as the recent one in Mumbai may want to double-check victim's credit cards for personal
accident cover. Terror attacks are automatically included in policies that cover "death due to any cause" and claims by beneficiaries must be honoured, the insurance regulator and card issuers say.

While in most cases, card holders interested in personal accident cover are required to pay for it, HSBC provides such cover free of charge to holders of its 'Premium' and 'Platinum' classes of cards.

"Terror attacks like the one which happened in Mumbai are covered under the terms and conditions of the policy. This cover is not for free and the customers opting for this policy pay for it," says a representative of SBI Cards, one of the largest card issuers in India.

Citibank card holders can purchase personal accident cover from Royal Sundaram Alliance Insurance or New India Assurance Company. Ajay Bimbhet, MD & CEO of Royal Sundaram Alliance, says his company's agreement with Citibank includes terror cover.

"Terror attacks would automatically be included in a policy that covers `death due to any cause'. It would also be absurd to make a distinction between damaged caused by state action against terrorists and damaged caused by terrorists during encounters while paying claims," says Insurance Regulatory & Development Authority (IRDA) member (actuary) R Kannan.

Sources say that nuclear, biological and chemical terrorism are excluded under the terms and conditions governing group personal accident cover. The quantum of cover provided depends on the sum assured under the policy which the credit card holder chooses.

HSBC Cards provides complimentary cover of Rs 1 crore for its Platinum card holders in case of accidents travelling by air and up to Rs 10 lakh for accidents in the course of rail or road travel. For those who have paid for personal accident cover, it is Rs 2 lakh for holders of its Classic cards and Rs 4.5 lakh for Gold card holders. Banks contacted by ET declined to say how many card holders were being given complimentary cover or how many had opted for paid personal accident insurance.