Is travel insurance worth getting?
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- Some typical travel insurance benefits include trip cancellation and interruption insurance, trip delay reimbursement, emergency medical coverage, emergency medical evacuation, lost or damaged baggage insurance, delayed baggage insurance and car rental insurance
- Many top travel credit cards provide enough travel insurance benefits to protect you in an emergency or if your plans change, so purchasing extra travel coverage likely won't be necessary
- However, if you plan to book an expensive trip or travel abroad for an extended period of time, you might want to purchase travel coverage. Check with your card issuer to confirm any coverage terms and conditions before purchasing any additional policies
With all the fun that comes with traveling to new locales, you always risk 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.
What is travel insurance?
Travel insurance helps provide financial compensation for mishaps like lost or stolen luggage or if you need 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 travel insurance benefits offered by your credit card provider.
Fortunately for travelers, many credit cards offer some form of travel insurance to cardholders, and some of the top travel credit cards offer an impressive lineup of travel protections. However, credit card travel insurance works a bit differently than a travel insurance policy you purchase.
As a rule, credit card travel insurance doesn’t typically 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. That said, many 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 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. One easy way to find out what your credit card covers is to call your credit card provider and have them walk you through your card’s benefits guide.
What does travel insurance cover?
|Type of travel insurance||Coverage overview|
|Trip cancellation insurance||Reimburses you for eligible expenses incurred when your trip is canceled for eligible reasons|
|Trip interruption insurance||Reimburses you for eligible expenses incurred when your trip is interrupted for eligible reasons|
|Trip delay reimbursement||Reimburses you for eligible expenses incurred if your trip is delayed by a certain amount of time|
|Emergency medical benefits||Reimburses you for eligible expenses incurred if you’re injured or become ill while traveling and require medical attention|
|Emergency medical evacuation||Coverage up to a certain amount for emergency medical services and transportation|
|Lost or damaged baggage protection||Reimburses you up to a certain amount if your baggage is lost or damaged by a common carrier|
|Baggage delay protection||Reimburses you for eligible expenses incurred (up to a certain amount) if your baggage is delayed (by a certain amount) by a common carrier|
|Rental car insurance||Primary or secondary coverage for theft and collision damage|
Let’s take a closer look at some of the most common types of travel insurance coverage and how they work.
Coverage for canceled, interrupted or delayed trips
If you need to cancel your trip, having trip cancellation and interruption coverage can provide reimbursement for the cost of your trip, including expenses like transportation, hotels and prepaid activities. Qualifying reasons might include events such as the death of a family member, terrorism, natural disasters and unforeseen illnesses or injuries. 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.
Generally, your trip needs to be delayed unexpectedly by six to 12 hours (but this varies by each policy) to qualify for trip delay reimbursement. This benefit typically offers $150 to $200 per day for a certain number of days — though sometimes, this benefit offers a certain amount per ticket — to cover necessary expenses like lodgings or food.
Getting stranded far from home and having to pay for extra nights in a hotel you didn’t budget for, having to change flights at the last minute or canceling some or all of a nonrefundable trip before you even hit the road can all 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 type of insurance to have.
Coverage for emergency medical situations
Emergency medical benefits can come in handy if you’re injured or become ill while traveling and require hospitalization, medication or treatment. 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. This is often add-on coverage for travel medical insurance, but it can come in handy if your treating physician recommends you go home to receive medical treatment or if a death occurs and there are costs associated with transporting the traveler’s remains.
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? If you need medical attention when you’re traveling and your health insurance won’t cover your costs, having travel insurance that pays for medical emergencies and medical transportation can save you a lot of money.
Coverage for lost, damaged or delayed baggage
Generally, lost or damaged baggage protection only covers up to a certain value, but your belongings are covered throughout your entire trip. Some policies only reimburse for luggage that is lost or damaged when it is checked with a common carrier. If your bag is permanently lost, having the right type of insurance can save you a lot money. If you’ll be carrying more expensive items, you may want to pursue a third-party plan that will reimburse more expensive items, such as a camera or computer. Additionally, note that you may need to file a police report within a certain timeframe to receive coverage.
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. You may face a daily limit on how much you can purchase to replace your delayed goods, along with a limit on what you can purchase. Additionally, these benefits don’t typically kick in unless your luggage is delayed for a specified period of time (usually six to 24 hours).
If you’re checking a bag while flying, you may want coverage for lost, damaged or delayed baggage. This coverage can 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. If you’re driving, however, you probably won’t need this type of coverage.
Coverage for rental cars
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 usually excludes liability for damage to other property or for injuries to others. However, some credit cards offer primary coverage, which typically provides reimbursement up to a certain amount for theft and collision damage. Note that you’ll typically need to decline the car rental company’s insurance in order to receive coverage through your credit card.
For domestic travel, your existing auto insurance policy may cover any issues with rental cars, and it’ll likely kick in before an additional collision policy anyway. Check out what your insurer covers first before getting an additional policy. It’s also worth noting that your credit card rental car insurance may apply overseas. However, it would be wise to look into additional car rental protections, whether with a third-party insurer or at the rental counter, since some countries are excluded from credit card rental car coverage.
How to use credit card travel insurance
If a trip is partially or fully booked on your credit card — be sure to confirm booking standards with your card provider first — you may be able to access travel insurance benefits that come with your credit 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 they’ll cover, exceptions to your coverage and how long you have to submit a claim (typically less than 60 days).
- Show receipts and necessary documentation. You’ll likely need to provide receipts when you file your claim if you want to get your money back. You might also need to provide key documentation such as showing how a loss occurred, correspondence with travel providers proving they won’t reimburse you, doctors’ notes, police reports or any other applicable paperwork.
- File the claim. Report any losses or situations 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 or situations 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 it plans to distribute your funds.
When is travel insurance worth it?
Where or not you should purchase travel insurance in addition to the benefits your credit card offers depends on how much coverage you already have and what your risk tolerance is. Some premium credit cards offer robust travel coverage — such as emergency evacuation coverage, lost baggage coverage or trip cancellation and interruption insurance — whereas no-annual-fee credit cards typically offer basic coverage like roadside assistance.
Note that travel insurance policies tend to get more expensive as you age. So the flat annual fees you’ll pay for premium travel credit cards such as The Platinum Card® from American Express ($695 annual fee) and the Chase Sapphire Reserve® ($550 annual fee) make their travel coverage more valuable the older you get.
Consider what type of travel insurance you may need and what events and belongings you need to have insured. If you want basic coverage for smaller issues, such as covering costs incurred if your flight is delayed, then your credit card policy may do the trick. But if you have ambitious travel plans that involve 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 reason.
When is travel insurance not worth it?
Depending on where you’re traveling and the type of trip you’re taking, travel insurance might not be necessary. For example, if your trip is completely refundable, trip interruption and cancellation insurance is likely not necessary. You may also not need any type of travel insurance if you’re taking a cheap or short domestic trip.
Additionally, if you’re traveling within the U.S., you likely won’t need additional medical coverage beyond your existing health insurance plan (though it would be good to check your policy first). If you’re traveling outside of the U.S., however, additional medical coverage — whether purchased or provided through a credit card — can be helpful in an emergency situation.
Should you get a top credit card for travel insurance?
Many travel credit cards can provide you with enough travel insurance benefits to protect you in an emergency or if your plans change, so purchasing extra travel coverage likely won’t be necessary. Of course, this depends on the type of trip you’re taking, among other factors.
If you’re looking for a new credit card and want one that provides solid travel insurance coverage, here are some of the best cards for travel insurance to consider:
|Card name||Annual fee||Travel insurance benefits|
|Chase Sapphire Preferred® Card||$95||
|Chase Sapphire Reserve®||$550||
|The Platinum Card® from American Express||$695||
|Capital One Venture X Rewards Credit Card||$395||
Although travel insurance can be a great cardholder perk, it probably won’t be the main factor you’re considering when picking out a new credit card. While it’s nice for frequent travelers, you’ll want to look for a credit card that offers benefits you’ll use, such as a great rewards program, a sign-up bonus or intro APR offers. 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 travel insurance to cover the occasional trip.
While you can’t predict the exact cost of every future trip you plan, you probably 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.
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.
Frequently asked questions (FAQs)
Travel insurance costs vary depending on the type of plan you select: Basic, middle-tier or comprehensive. They also typically depend on factors like your trip’s total cost, how long you’re traveling for, where you’re traveling, how many people require coverage and travelers’ ages. In general, you can expect to pay anywhere from 4 percent to 11 percent of the total cost of your trip.
Consumers typically run into two primary problems with travel insurance: 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 coverage. 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 as 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 it will contain exclusions for travel to specific areas, like those prone to extreme weather events or with current travel warnings. As for car rental insurance, your credit card coverage may not be applicable in certain countries, or it may not cover certain situations. Credit card car rental coverage is also usually secondary coverage, which means your credit card company only pays what your primary car insurance policy won’t cover. However, some premium travel credit cards do offer primary car insurance, like the Chase Sapphire Preferred® Card and the Chase Sapphire Reserve.
You often need to pay for all travel expenses with an eligible credit card if you want to potentially use that card’s travel insurance offerings. In many cases, you’ll need to pay for the common carrier fare on the plane, train, bus or cruise ship you plan on traveling with in order to gain access to your travel insurance offerings. Note that 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.
The bottom line
Credit card travel insurance benefits can offer travelers solutions to frustrating and costly travel 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 you’re worried about travel issues that may require expensive solutions, then purchasing a separate travel insurance policy may be worth it.
Already planning your next vacation? Check out Bankrate’s travel toolkit for tips and tricks on how to maximize travel with a credit card.
*For Capital One products listed on this page, some of the above benefits are provided by Visa® or Mastercard® and may vary by product. See the respective Guide to Benefits for details, as terms and exclusions apply.