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With all the fun that comes with traveling to new locales, you always risk of running into expensive problems far from home. Lost luggage, canceled flights, injuries, rental car mishaps—all sorts of inconveniences can occur when traveling. One way to soften the blow of travel disasters, at least financially, is to have travel insurance.
Fortunately, credit card travel insurance is fairly common. If you book your trip with a top travel credit card, chances are you already have some level of protection. Here’s what you need to know about travel insurance, what kind of travel protections you can get through your credit card and what you may want to line up elsewhere.
What is travel insurance?
Travel insurance helps provide financial compensation to take care of mishaps like lost or stolen luggage or needing to cancel a trip for reasons that are beyond your control. In the event of a qualifying incident, you can file a claim with the insurance company to get money back for certain expenses, up to a previously agreed-upon limit. You can purchase travel insurance policies from insurance providers — or you can take advantage of a travel insurance policy that is a perk offered by your credit card provider.
How credit card travel insurance works
Fortunately for travelers, many credit cards offer some form of travel insurance to cardholders, and some cards cards offer an impressive lineup of travel protections. Credit card travel insurance works a bit differently than a travel insurance policy you purchase, however. As a rule, credit card travel insurance doesn’t offer the same level of comprehensive coverage you’d get from a purchased policy. You also can’t choose what type of coverage you receive.
Most travel credit cards offer some level of coverage for issues like trip cancellation and interruption, trip delays, lost luggage, baggage delays, rental cars and travel accidents.
If you’re planning a trip, one easy way to find out what your credit card covers is to call your credit card provider and have them walk you through the benefits. If you’re considering buying separate travel insurance, it’s worth learning what type of coverage your credit card offers before paying for protection you may already have.
How to use your credit card travel insurance
If a trip is partially or fully booked on your credit card (confirm booking standards with your card provider), you may be able to access travel insurance benefits that come as a perk for your card. Here’s how to use your credit card travel insurance:
- Confirm your coverage. Before you file a claim, it’s helpful to brush up on your coverage. Your card should come with a benefits guide that outlines what type of travel coverage you have, including the maximum amount of losses they’ll cover, exceptions to your coverage, and how long you have to submit a claim (typically less than 60 days).
- Save your receipts. You’ll likely need them when you file your claim if you want to get your money back. You’ll probably also need to provide documentation showing how the loss occurred, correspondence with travel providers proving they won’t reimburse you, doctors’ notes and any other key paperwork.
- File the claim. Report any losses to the benefits administrator within your policy’s claim time frame. Generally, you’ll download a claim form from the credit card provider’s website and submit evidence of the losses for which you’re seeking reimbursement.
- Wait for a decision. Your credit card provider will contact you with a decision regarding your claim and, if approved, explain how they plan to distribute your funds.
Common types of travel insurance coverage
Let’s take a closer look at some of the most common types of travel insurance coverage and how they work.
Changes to your trip
Trip cancellation and interruption protection
If you need to cancel your trip, having trip cancellation coverage can provide reimbursement for up to 100 percent of the cost of your trip, including expenses like transportation, hotels and prepaid activities. Reasons you may be able to cancel include events such as the death of a family member, terrorism, natural disasters and unforeseen illnesses or injuries.
Coverage for trip cancellation varies by card, and a high annual fee may or may not get you more. Capital One Venture X Rewards Credit Card, for example, charges a $395 annual fee and offers a max of $2,000 per insured person for trip cancellation and interruption. The Platinum Card® from American Express and Chase Sapphire Reserve® (with $695 and $550 annual fees, respectively) offer cardholders a more generous $10,000 per person and $20,000 per trip cancellation and interruption max — but so does the Chase Sapphire Preferred® with its more modest $95 annual fee.
Check your policy to see what’s included as each policy differs. In some cases, events like jury duty or being laid off from your job qualify. Trip interruption protection acts similarly in the event you need to leave a trip early.
Trip delay reimbursement
Generally, your trip needs to be delayed unexpectedly by three to 12 hours (but this varies by each policy) to qualify for trip delay reimbursement, which offers a per-diem dollar amount usually in the $150 to $200 range that can cover the costs of necessities during the delay like lodgings or food.
Amex Platinum, Chase Sapphire Reserve, Chase Sapphire Preferred and Capital One Venture X all offer up to $500 for trip delay reimbursement for each ticket purchased with these cards.
When you might need it
Getting stranded far from home and having to pay for extra nights in a hotel you didn’t budget for, forking out to change flights at the last minute, or canceling some or all of a nonrefundable trip before you even hit the road, can cost a pretty penny. If you’re traveling somewhere prone to major weather incidents and have multiple flights (increasing the possibility of missed connections), this is an important one.
Emergency medical benefits
If you’re injured or become ill while traveling and require hospitalization, medication or treatment, then emergency medical benefits can come in handy. This type of coverage is more necessary if you’re traveling internationally or on a cruise where you may not have access to medical care covered by your health insurance plan. Unfortunately, in most cases, you’ll need to pay for your medical care out of pocket and file a claim later for reimbursement.
If you have a medical emergency while traveling that requires transportation to the nearest medical facility, medical evacuation coverage can help with those costs. Often this is an add-on to travel medical coverage, but can come in handy if your treating physician recommends you go home to receive medical treatment or a death occurs and there are costs associated with transporting the traveler’s remains. Chase Sapphire Reserve offers up to $100,000 in emergency evacuation and transportation coverage per trip.
When you might need it
Are you traveling out of network? How about out of the country or to a remote locale where it’s difficult to access medical care? You may need medical attention when you’re traveling and if your health insurance won’t cover your costs, having travel insurance that pays for medical emergencies and medical transportation can save you a large amount of money.
An all-too-common scenario: your baggage is lost or stolen while traveling, a hassle most travelers have experienced at some point. At best, it’s an inconvenience. At worst, it can be downright expensive. If you’re a frequent flyer, this is coverage your credit card should have and worth paying a bit extra for. Southwest Rapid Rewards® Plus Credit Card and United℠ Explorer Card for example, offer up to $100 per day for three days for baggage delay and up to $3,000 per passenger for lost luggage. Premium travel cards typically offer a couple of extra days of coverage across more airlines.
Lost or damaged baggage protection
Generally, lost or damaged baggage protection only covers up to a certain value and your belongings are covered throughout your entire trip. Some policies only reimburse for luggage that is lost or damaged when it is checked with an airline or other type of transportation carrier. If your bag is permanently lost, the right insurance can save you a lot. You may want to pursue a third-party plan that will reimburse more expensive items, such as a camera or computer.
Baggage delay protection
Even if your belongings eventually arrive in one piece, baggage delay protection can reimburse you for any costs you incur while waiting to be reunited with your belongings. This is especially helpful if you lose your bags and are delayed on your way to your visiting location. You may face a daily limit on how much you can purchase to replace your delayed goods and often these benefits don’t kick in unless your luggage is delayed for a specified period of time (usually 12 or 24 hours).
When you might need it
If you’re checking a bag while flying, you may want coverage for lost or damaged baggage to help you pay for clothing, toiletries, and any other items you need to replace if your luggage goes missing or is harmed, especially if it gets lost by the time you arrive at your destination. You probably don’t need this coverage if you’re driving.
Rental car protection
Auto rental insurance
Many credit cards offer rental car coverage for collisions, loss and damage. It’s usually secondary coverage, meaning it kicks in after your primary auto insurance, and it also usually excludes liability for damage to other property or for injuries to others. Amex Platinum, Chase Sapphire Reserve and Marriott Bonvoy Brilliant™ American Express® Card all offer up to $75,000 in rental car coverage.
When you might need it
For domestic travel, your existing auto insurance policy may cover any issues with rentals, and will likely kick in before an additional collision policy anyway, so check out what your insurer covers when deciding if you need this. If you’re renting a car overseas, this may be the very least you need in terms of auto coverage and it’s probably wise to look into additional protections, whether with a third-party insurer or at the rental counter, particularly as rentals in some countries are excluded from credit card rental car coverage.
Common credit card travel insurance problems
Two of the primary problems that consumers run into with travel insurance are not having enough coverage or not actually qualifying for the coverage they do have. When dealing with travel insurance that you gain access to as a cardholder perk, you’ll want to read through your policy before booking your trip to ensure you know exactly what you have coverage for and whether you need any extra.
When reviewing your insurance terms, it’s important to take note of what your coverage limits are. For example, your credit card travel insurance may cover medical treatment, but there may be a limit to how much they’re willing to cover. The type of vacation you take can also impact your insurance. Most basic travel insurance does not cover activities that can be viewed as dangerous, like sky diving or rock climbing, or will contain exclusions for travel to specific areas, like those prone to extreme weather events or with current travel warnings.
Regarding rental car insurance, your credit card coverage may not cover issues in certain situations (like driving on a gravel road). Credit card rental coverage is also generally considered secondary coverage, which means your credit card company only pays for things your primary car insurance policy won’t cover. However, some premium travel credit cards do offer primary car insurance.
Remember that you often need to pay for all travel expenses with that credit card if you want to potentially use that card’s travel insurance offerings. In many cases, you need to pay for the common carrier fare on the plane, train, bus or cruise ship you plan on traveling via in order to gain access to your travel insurance offerings.
Some credit card providers may require you to book the entirety of your trip on their card, whereas others simply need you to book the main transportation to your destination in order to qualify. Because these requirements can vary so much, it’s important to confirm how to qualify for your insurance benefits before you book your trip.
How to choose a credit card with travel insurance
If you’re looking for a new credit card and want one that provides solid travel insurance coverage, you’ll want to keep a few factors in mind.
Think big picture
Travel insurance can be a great cardholder perk, but it probably won’t be the main factor you’re considering when picking out a new credit card. While it’s a nice extra for frequent travelers, you’ll want to look for a credit card that offers great rewards and redemptions, a good sign-up bonus, a low APR, low or no fees and other benefits you can use regularly. A card that rewards you for your regular spending may be more valuable in the long run than one that comes with a limited amount of insurance coverage for the occasional trip.
Consider the value of the coverage for your travels
While you can’t predict the exact cost of every future trip you plan, you generally have an idea of what kind of trips you take and what type of coverage they require. For example, if you love taking road trips in your trusty SUV and rarely rent a car or book a flight for a vacation, then you’re less likely to need car rental or baggage delay coverage. But having roadside assistance as a perk may give you much-needed peace of mind when you hit the open road. Look for a credit card that offers coverage in line with the way you travel most often.
Confirm coverage limits and exclusions
There is no worse feeling than thinking you have insurance coverage, only to find you’re going to need to pay more out of pocket than you realized when something does go wrong. Double-check the fine print for the travel insurance coverage before relying on a credit card’s insurance perks. You’ll likely come across some potential exclusions.
Do you still need separate travel insurance?
Should you purchase travel insurance in addition to your credit card offers? That depends. on how much coverage you already have and what your risk tolerance is. Some premium credit cards offer robust travel coverage that includes things like emergency evacuations, whereas others offer basic coverage like roadside assistance.
One thing to note: Travel insurance policies get more expensive as you age. So the flat annual fees you pay for premium travel credit cards such as Amex Platinum or Chase Sapphire Reserve make their travel coverage more valuable, the older you get. The average cost of travel insurance is $95, but that increases to $227 for someone who is 70 years old. That’s about half the annual fee of the Chase Sapphire Reserve.
Consider what type of protection you may need and what events and belongings you need to have insured. If you want basic coverage for smaller issues, such as covering the cost of a missed connection if your flight is delayed, then your credit card policy very well may do the trick.
But if you have ambitious travel plans involving bigger risks, like booking a nonrefundable international trip, then you’ll likely want to purchase a travel insurance policy that will allow you to cancel a trip for any reasons, even foreseeable events such as an in-progress pandemic.
The bottom line
The travel insurance that comes with some credit cards can offer great solutions to travelers that experience frustrating and costly problems. Because you don’t need to pay for this cardholder perk, it’s a great bit of extra protection to have in your back pocket. However, if you’re spending a lot on an upcoming trip and are worried about travel issues that may require expensive solutions, then purchasing a separate travel insurance policy may be worth it.