What Credit Card Travel Insurance Doesn't Cover
Many credit cards offer travel insurance. While rental car coverage and trip cancellation insurance seem attractive among a bulleted list of perks, there's more to the story. Here's what you need to know about what credit card travel insurance actually covers and, more importantly, what it doesn't.
Which Credit Cards Give You Free Travel Insurance?
Travel protection and travel insurance benefits won't be available on every credit card, but if you use travel credit cards, they probably have an insurance-related perk or two. It's also typically the case that travel cards with annual fees usually offer more types and higher levels of coverage.
For instance, the Chase Sapphire Reserve card, which has a $450 annual fee, offers trip cancellation and interruption insurance, lost luggage reimbursement, trip delay reimbursement, and emergency evacuation and transportation coverage, among other benefits. But the Capital One VentureOne Rewards Credit Card, with no annual fee, has more limited travel coverage, offering travel accident insurance and an auto rental collision damage waiver.
Of course, card products are unique, so it's up to you to read the fine print before you travel so you don't make any assumptions. The fine print on credit card travel protection and insurance is massive, says Jason Hargraves, managing editor of insurance marketplace and news website InsuranceQuotes.com. "The limitations are endless," he says. Just for kicks, try getting through the American Express Platinum Card's 21-page baggage insurance plan guide and see what he means.
[Read: Best Travel Rewards Credit Cards.]
Understanding Your Credit Card's Travel Insurance Coverage
You should receive a complete benefits guide and full terms and conditions when you get a new credit card, but not everyone actually reads them. If you need to look up your credit card travel insurance, you can always go online. "I recommend looking at the credit card sales page to see the highlights of your benefits," says Lee Huffman, credit card rewards expert at travel blog BaldThoughts.com. "Then, call customer service to ask any questions that you need clarification on."
Knowing what travel coverage you have is Step 1. Step 2 is understanding the limitations of those coverages. "Although many credit cards offer trip-related benefits, sometimes those protections are not available in other countries or they are only available for a limited time," says Huffman.
In some cases, you might even be surprised to learn that you have more coverage than you thought. "Many travel benefits, such as trip cancellation or trip interruption insurance or baggage delay insurance, will cover the cardholder and immediate family members, even if the cardholder is not traveling with them," says Joe Kerr, executive director, Chase Rewards & Benefits.
Here are some of the main credit card travel protections and insurances you may have, along with some possible limitations:
Auto rental collision damage waiver . This coverage offers reimbursement for collision and damage expenses when you rent a car and decline the rental company's coverage. Secondary coverage, which applies after your existing auto coverage, is more common than primary coverage, which doesn't require you to file a claim with your insurance company.
Travel accident insurance. If you die or are seriously injured on your trip, you or your beneficiaries could be eligible for a benefit. This doesn't mean that if you break your ankle or have a heart attack while you're on vacation that you or your family will get a check. Coverage is usually limited to specific types of accidents that cause death or dismemberment, like if you're seriously injured in an airline accident or because your cruise ship crashes into a dock.
[Read: Best Airline Credit Cards.]
Trip cancellation or interruption insurance. If you have to cancel or cut your trip short, you could get reimbursed for nonrefundable trip expenses with trip cancellation or interruption insurance. But this insurance kicks in for only very specific cases, says Hargraves.
"Most credit cards will only cover trip insurance if it's a surprise illness," he says. So if you're seven months pregnant and you go into labor before a trip you had planned, that's not going to be covered by credit card travel protection because it's a preexisting condition. The same goes if you have a chronic illness and it flares up. "It has to be a surprise, out-of-the-blue-like incident, not something that could have reasonably been expected to happen to you," he says.
Situations that are more likely to be covered: the sudden death of a close family member, getting subpoenaed to court or a natural disaster. But if you simply have a change of heart, you're not covered.
Trip delay reimbursement. If your flight is delayed or canceled and you incur extra expenses, like having to pay for a hotel or meals, you may get reimbursed up to a covered amount. For example, if you're delayed for at least six hours and you paid with a credit card that offers this coverage, you might be covered for up to $500 per traveler in your party -- and that's in addition to any airline vouchers you receive for food or hotels.
Lost/delayed luggage. "If you lose your bag, you can expect up to a certain dollar amount of recovery (from the airline). But that money won't come to you anytime soon," says Hargraves. That's because you're almost always going to have to file a complaint with the airline and go through its procedures and then file a claim with your credit card company. "If you're traveling and a bag's missing, essentially (your credit card benefit) is not going to help you at that moment."
Cards may offer up to a few hundred dollars in baggage delay benefits per traveler, per trip, if luggage doesn't arrive on time, usually within three to six hours. The coverage is designed to reimburse some of the cost for items you might need to replace quickly, like toiletries and clothing -- so don't think you can use the money for souvenirs. Another surprise to some people? "If your bag is delayed when you're coming home, you get nothing," says Hargraves.
Emergency evacuation and transportation. Using this benefit, you can get coverage toward transportation and medical services necessary during an emergency evacuation. But you may have to make arrangements through and get approval from the card issuer's benefits administrator, which may not be top of mind when you're in that emergency situation. "If you're going the real adventurous route, you definitely have to double - check your insurance," Hargraves says. In some cases, you might be better off working with a specialized travel insurance company for peace of mind.
[Read: Best Hotel Credit Cards.]
When Does Credit Card Travel Protection Not Apply?
Even if your travel credit card offers travel protections, there are some factors that might affect your eligibility for coverage. For example, you might not be covered if:
-- You didn't use your card to pay for your full trip.
-- You're doing extended travel, and the length of the trip exceeds the coverage.
-- Your destination isn't covered, since some coverage only applies to domestic travel.
-- The cause of your trip delay, cancellation or interruption isn't among the covered reasons.
-- The cause of an injury or medical emergency is self-inflicted or the result of a preexisting condition.
To make the most of your credit card travel insurance or travel protection, keep these tips in mind:
Ask specific questions before your trip. When calling your credit card company to ask about your travel coverage, come up with specific scenarios. "Say, 'I'm going to the pyramids in Egypt. What if I break my ankle while I'm at the pyramid? How are you going to get me out of there? What will you cover? How quickly can you do that?'" says Hargraves.
Submit claims as soon as possible, and stay organized. "You have time to file your claim, but life gets in the way and paperwork can get lost the longer you wait to file," says Huffman. That's why if something happens, Kerr recommends calling the number on the back of your card or going online to find out how to initiate a claim. For instance, you might discover that you need a copy of the lost luggage report from your airline for a lost luggage claim or a doctor's note to initiate trip cancellation coverage.
Use the right card to pay for the trip. The entire cost of the trip must have been charged to a particular credit card (or paid for with points earned on that card) in order to be eligible for certain benefits, says Kerr. So if you're splitting expenses among a few cards to maximize rewards, keep in mind that it could work against you in terms of protections.
Have patience. Some claims may require a lot of paperwork and several weeks to be processed. "It's not likely you're going to cancel your trip or go home early, and you're going to have a check waiting for you, or money waiting in your account," says Hargraves.
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