Credit Card Travel Insurance Explained
Whether you’re traveling for business or pleasure, you really don’t want anything to go wrong. No one wants to miss an important meeting or a rock star performance, but travel provides plenty of potential time-sucking disasters. Travel insurance can help you navigate these issues, and your credit card might even provide it. Learn how to take full advantage of this perk.
Table of Contents
- 1 What Is Credit Card Travel Insurance?
- 2 How Does Credit Card Travel Insurance Work?
- 3 Is Credit Card Travel Insurance Worth It?
What Is Credit Card Travel Insurance?
Many credit cards offer travel insurance as a way to secure your money against sudden mishaps. Different credit cards will provide more coverage in certain areas than others; one might cover the total cost of your cancelled trip, while others will focus on covering your unexpected hotel expenses; still others may offer add-on coverage for rental cars. Here’s some of the things that credit card travel insurance may cover.
Trip Cancellation Insurance
If you have to cancel a trip due to sudden illness, a death in the family, or unfavorable weather conditions at your destination, you’ll probably be reimbursed for at least part of your trip cost.
Some credit cards will put a limit on how much they’ll put towards your reimbursement, and others will limit coverage depending on your reason for cancelling. Serious reasons are usually covered, but they won’t reimburse you if you cancel your trip so you can go to a friend’s birthday party.
Trip Delay and Disruption Insurance
Flights get delayed all the time, but longer delays can throw off your travel plans and force you to pay out of pocket for a place to stay. Your credit card travel insurance can help offset the cost. A few credit cards will even help pay for your meals during a delay!
However, you usually have to be delayed for a certain amount of time before these benefits kick in. It’ll differ depending on the credit card.
Travel Accident Insurance
This sounds like it would pay for your medical bills if you got injured while traveling, but unfortunately that’s not the case.
Travel accident insurance actually pays you or your beneficiaries a certain amount if you’re seriously injured or killed while traveling on a commercial airline, functioning more as a life insurance policy than medical insurance. This is one you really hope you never have to use!
Your card might cover lost or delayed luggage. Basically, your card issuer will pay for some replacement essentials you’ll need until you get your bag back. Most cards only cover your checked bag, though. If your carry-on bag goes missing somehow, you might not be able to claim it under your travel insurance.
If you are injured while traveling, it’s likely that you’ll be out of network of your health insurance. Some credit cards offer emergency medical or dental coverage as part of their travel insurance package, but this can only be used to offset costs not covered by your regular health insurance.
This is one of the better travel insurance benefits, but it’s also one of the rarest. Know ahead of time if your policy includes these benefits.
If you’re injured while traveling to an area that doesn’t have the necessary medical infrastructure, you might need to be evacuated. Getting home quickly is a priority, but so is not going bankrupt doing so. Only top tier travel credit cards will offer evacuation coverage in their travel insurance, but this is one area that you’ll be thankful you didn’t skimp when the time comes.
How Does Credit Card Travel Insurance Work?
Travel insurance is often a perk that comes with many travel credit cards. In fact, you don’t even have to sign up for it with some credit cards, you just have to use that card to book the trip. Of course, these cards often have membership fees, but these fees easily pay for themselves if you compare them against the cost of some travel disasters.
Not every credit card can offer trip insurance, and not all travel insurance is the same. There are agencies that specialize in travel insurance, and they will absolutely cover things like emergency medical costs or an evacuation. However, they are also typically more expensive than credit card travel insurance and more time-consuming to get.
Limits on Coverage
Each credit card company sets their own limits of what they’re willing to cover. If your credit card travel insurance policy will cover $5,000 in cancelled trip fees, but you have already charged $6,000, you’ll be responsible for that extra thousand.
Furthermore, credit card travel insurance will only apply if you pay for the trip with the credit card. Some credit cards only require that you pay for a portion of the trip with the card, others need you to charge the whole trip. Keep that in mind if you plan on relying on credit card travel insurance.
Is Credit Card Travel Insurance Worth It?
Ultimately, credit card travel insurance is a relatively low-cost perk if you’re looking to get a new credit card anyway. It can cover a lot of the smaller travel mishaps, but credit card travel insurance is unlikely to cover the real disasters unless you pay for an exclusive card membership.
However, some coverage is better than none at all. If you don’t want to fork over hundreds of dollars for an outside travel insurance policy, your credit card might be the way to go. Especially if you’re relatively healthy and not traveling anywhere too out of the way, your credit card might provide you with all the coverage you need anyway.
Like any insurance, the hope here is that you never have to use it. But relying on credit card trip insurance might be a good middle ground between being prepared and not breaking the bank.
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Dayton is a chronic Wikipedia addict, which is detrimental to her social life but stellar for her writing. She resides in Boise, ID, surrounded by her own frantic outlines, highlighted encyclopedias, and potatoes. The latter was not by choice.
This post was updated February 28, 2019. It was originally published August 20, 2018.