Credit cards typically provide limited travel benefits. Before making decisions based on these benefits, it’s wise to read your policy, speak to your provider or consult qualified advisors (like PolicyAdvisor ).
Credit card trip cancellation coverage typically only extends to certain reasons such as COVID-19; by comparison, individually owned travel insurance offers much broader protection at around the same cost.
Coverage Options
Credit cards provide multiple types of insurance coverage, such as purchase protection and balance protection. Many also provide concierge services and travel accident insurance as part of their regular policy. Most policies are written as group policies so more Canadians can be insured at economical standard group rates.
However, credit card protection insurance tends to provide less comprehensive benefits than travel insurance plans. For example, credit card trip cancellation coverage only extends to specific circumstances that would necessitate its cancellation, such as bankruptcy or natural disasters at either your home or destination, jury duty commitment or terrorism (depending on your plan).
Financial planners typically exclude activities considered dangerous from credit card protection plans, including skydiving, bungee jumping and motorbike racing. Individually-owned travel insurance plans offer additional coverage for these sports; many individuals find the additional expense worth it for peace of mind.
Eligibility
Many credit cards provide embedded coverages such as car rental insurance, travel cancellation/interruption insurance, purchase protection and $0 fraud liability that can provide peace of mind in case of unexpected financial calamity. But it’s essential that you understand which types of coverages are offered and whether they meet your individual needs; medical disability may exclude certain conditions while unemployment coverage might exclude specific employment forms; therefore it is vitally important that before committing to any form of credit card insurance policy the fine print be carefully studied first.
*These terms and conditions for these policies may change over time.
Limitations
Credit card travel insurance typically requires charging all or a significant portion of your trip costs to the card before its coverage will apply. Some policies also may require you to decline rental car company collision coverage for this to work properly.
Individually-owned travel insurance policies tend to offer higher coverage limits and serve as primary (that is, first) coverage rather than secondary coverage from credit cards policies. They may also provide greater medical and emergency expenses coverage.
Another key difference between credit card coverage and individual travel insurance plans is that credit card plans often exclude extreme sports like skydiving and bungee jumping; individual travel plans tend to cover such activities. Furthermore, annual fees associated with credit cards offering travel benefits can often exceed what travelers usually pay for individual plans; to determine if any additional annual fee associated with any travel protection offered by your credit card plan is worth paying for, read up on its policies carefully and read details of each policy thoroughly.
Exclusions
Many travelers mistakenly assume that credit card travel protection provides all the same coverage as traditional travel insurance plans; however, this is often not true. Annual fees on credit cards tend to be higher than those associated with basic plans and the coverage can often be limited by certain terms and conditions – for instance trip cancellation and interruption insurance may only cover up to a certain limit per period; some cards even offer concierge services or $0 fraud liability, though typically this doesn’t include emergency medical or evacuation cover.
Other coverage limitations may also come as a surprise. For example, most credit card travel protection covers only certain reasons for trip disruption – like illness or the death of a close family member – while travel insurance often includes more situations, like jury duty and terrorism (depending on your plan).
