How to get the most out of credit card travel insurance

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With all the fun and excitement that comes with traveling to new locales, you also run the risk of running into big and expensive problems. Lost luggage, natural disasters, injuries and 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 and chances are you already have a travel credit card that provides some level of protection. Let’s take a closer look at what travel insurance is, what credit card travel insurance problems you may run into and everything else you need to know about getting the most out of your travel insurance offerings.

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 in order to get some or all of your money back for certain expenses, typically 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. Credit card travel insurance works a bit differently than a travel insurance policy you purchase. As a general rule of thumb, credit card travel insurance doesn’t offer the same level of comprehensive coverage that you’d get from a purchased policy. You also can’t choose what type of coverage you receive.

Most often, credit cards offer some level of coverage for issues like trip cancellation and interruption, trip delays, lost luggage, baggage delays, rental cars, travel accidents, and emergency evacuations.

If you’re wondering, “does my credit card have travel insurance?” call up your credit card provider and they’ll walk you through the benefits you have. Even if you plan on buying 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), then as the cardholder 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 try to file a claim, it can be 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).
  • Organize your records. Hopefully, you saved your receipts because you’ll likely need to include them when you file your claim if you want to get your money back. You will probably also need to provide documentation surrounding how the loss occurred, correspondence with travel providers proving they won’t reimburse you, doctors’ notes and any other key paperwork surrounding your claim.
  • 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 will need to submit information regarding your trip and 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 it’s approved they’ll walk you through how they plan to distribute your funds.

The most 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. Check your policy to see what’s included as each policy differs and 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) in order 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.

When you might need it

Getting stranded far from home and having to pay for extra nights in a hotel that you hadn’t planned 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 to somewhere prone to major weather incidents, have multiple flights to get to and from your destination (missed connections can happen), or snagged the deal of a lifetime on the trip and know you don’t have much leeway in your budget, this is probably an important one. It’s also worth pointing out that injuries can happen anywhere at any time, so this is a good bit of coverage to have in your back pocket if you’re booking a personal trip on your own dime.

Medical aid

Emergency medical benefits

If you become ill or injured while traveling and require hospitalization, medication or treatment, then emergency medical benefits can aid you. This type of coverage is more necessary if you’re traveling internationally or are taking a cruise as you most likely won’t 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 will need to file a claim for reimbursement.

Medical evacuation

If you have a medical emergency while traveling that requires transportation in order to get 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 really 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 home.

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.

Baggage protection

Lost or damaged baggage protection

If your baggage is lost or stolen during travel, you could lose a lot of money when it comes time to replace those goods. If you’re traveling with expensive tech items or equipment, you may want to pursue a third-party plan that will reimburse more expensive items in your baggage if it is lost or stolen. Generally lost or damaged baggage protection only covers up to a certain value and your belongings are covered throughout your entire trip, but some policies only reimburse for luggage that is lost or damaged when it is checked with an airline or other type of transportation carrier.

Baggage delay protection

Even if your belongings eventually arrive in one piece, having 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 otherwise, for example, if you’re driving and in control of where your bags are at all times.

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.

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 make sure you know exactly what you have coverage for and whether you need any extra.

Insufficient coverage

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.

When it comes to 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 that your credit card company only pays for things that your primary car insurance policy won’t cover. However, some premium travel credit cards do offer primary car insurance.

Excluded events

Keep in mind 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.

Even with the best policy, typical travel insurance doesn’t cover claims due to known, foreseeable or expected events such as:

  • Warnings
  • Travel advisories
  • Epidemics
  • Pandemics
  • Government prohibitions
  • Fear of travel
  • Preexisting medical conditions

Best credit cards for travel insurance

If you want to sign up for a new credit card that has strong travel insurance benefits, take a look at some of the best credit cards for travel insurance.

Chase Sapphire Reserve®: Best for luxury travel

  • Rewards rate: Earn 5X total points on air travel and 10X total points on hotels and car rentals when you purchase travel through Chase Ultimate Rewards® immediately after the first $300 is spent on travel purchases annually. Earn 3X points on other travel and dining. 10X total points on Lyft purchases (through Mar. 31, 2022); 1X points on all other purchases
  • Welcome offer: 60,000 points after spending $4,000 on purchases within the first three months
  • Annual fee: $550 for new cardmembers
  • Regular APR: 16.99 percent to 23.99 percent variable

The Chase Sapphire Reserve credit card has a hefty annual fee of $550 but may be worth the money for those who travel a lot and want to get their hands on luxury travel perks and extensive travel protections. Some of their travel insurance protections include trip cancellation, auto rental collision damage coverage, baggage delay insurance, trip delay reimbursement, travel accident insurance, lost luggage reimbursement, emergency evacuation and transportation coverage, travel and emergency assistance and emergency medical or dental benefits.

Chase Sapphire Preferred®: Best for budget travel

  • Rewards Rate: Enjoy new benefits such as a $50 annual Ultimate Rewards Hotel Credit, 5X points on travel purchased through Chase Ultimate Rewards®, 3X points on dining and 2X points on all other travel purchases. Plus, earn 5X points on Lyft rides through March 2022.
  • Welcome Offer: Earn 100,000 bonus points after you spend $4,000 on purchases in the first three months from account opening.
  • Annual Fee: $95
  • Regular APR: 15.99 percent to 22.99 percent variable

For those looking to spend less on an annual fee, the Chase Sapphire Preferred is a lower-priced alternative to the Sapphire Reserve at $95 a year but still comes with some impressive travel perks. You can earn 100,000 points worth $1,250 in travel (when redeemed through Chase Ultimate Rewards®) after spending $4,000 on your card within the first three months. You’ll also earn 5X points on travel purchased through Chase Ultimate Rewards®, 3X points on dining and 2X points on all other travel purchases.

In terms of travel insurance, cardholders have access to trip cancellation and interruption insurance of up to $10,000 per person and $20,000 per trip, as well as baggage delay insurance of up to $100 per day for five days.

Wells Fargo Propel American Express® card: Best for no annual fee

  • Rewards Rate: Earn 3X points on dining, gas stations, ride-shares, transit, flights, hotels, homestays, car rentals and popular streaming services; also earn 1X points on other purchases
  • Welcome Offer: Earn 20,000 bonus points worth $200 when you spend $1,000 within three months of account opening
  • Annual Fee: $0
  • Regular APR: 14.49 percent to 24.99 percent variable

If you’re keeping a close eye on your wallet and curious to discover what credit cards offer travel insurance, Wells Fargo has an option you may want to consider. Consumers who don’t want to pay any annual fees will appreciate that the Wells Fargo Propel American Express® card has none. No annual fee does mean fewer perks, however, travel lovers can still look forward to benefits like receiving $50,000 in rental car insurance for damage or theft and getting up to $1,000 in coverage per trip for lost luggage.

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 about the bigger 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 is a nice extra for frequent travelers to take advantage of, typically, you’ll want to look for a credit card that offers a great sign-up bonus, a low APR, low or no fees and other benefits that you may get more use out of. 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 types of trips you take and what type of coverage they require. For example, if you love taking road trips in your trusty SUV and never need to rent a car or fly to go on vacation, then you’re less likely to need auto rental coverage or baggage delay coverage, but having roadside assistance as a perk may give you some much-needed peace of mind when you hit the open road. Look for a credit card that offers coverage that is in line with the types of trips you take most often.

Confirm coverage limits and exclusions

There is no worse feeling than when you think you have insurance coverage that has your back, only to find out 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 a decent amount of potential exclusions.

Do you still need separate travel insurance?

Whether or not you need to purchase a travel insurance policy separate from what your credit card offers will depend on how much coverage you already have and what your risk tolerance is. Some credit cards offer robust travel coverage that includes things like emergency evacuations, whereas others keep things on the simpler side and offer the most basic level of coverage like roadside assistance.

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 bigger plans on the horizon and are taking bigger risks, like booking a nonrefundable international trip with hopes that the coronavirus pandemic will come to an end, 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.

The information about the Wells Fargo Propel American Express® card has been collected independently by Bankrate.com. The card details have not been reviewed or approved by the card issuer.