Credit card travel insurance offers comprehensive protection, but it’s essential that travelers understand its coverages and limitations before purchasing one.
Trip cancellation and interruption coverage is one of the more frequently sought benefits, typically covering airfare, hotels and any other pre-booked expenses.
Others policies cover accidents and lost luggage, but often come with lower caps and strict exclusions (like preexisting medical conditions). For more comprehensive protection, standalone travel insurance could be more suitable.
What is covid?
Credit cards provide various forms of travel protection, such as trip cancellation/interruption insurance and lost luggage reimbursement. Some premium credit cards, like the Chase Sapphire Reserve card, even provide medical evacuation and accident coverage.
However, it should be noted that credit card travel protections don’t usually offer all of the coverage of comprehensive travel insurance policies. For instance, they often feature lower limits for medical reimbursement than comprehensive policies, as well as potentially excluding activities like scuba diving.
Credit card protections only cover travel booked using that particular credit card; therefore, travelers may prefer purchasing standalone travel insurance policies instead. Which option best meets their trip and financial situation remains to be seen.
What is covid cover?
Although most credit card travel insurance policies don’t currently address this issue, certain cards offer travelers an opportunity to cancel or reschedule trips during a coronavirus pandemic. Such cards typically include those offering comprehensive travel protection coverage such as Chase Sapphire Preferred and American Express Platinum Cards which provide trip cancellation/interruption, rental car damage waiver coverage, lost luggage reimbursement services and emergency assistance services.
These cards also include trip interruption coverage that reimburses up to 200% of prepaid, non-refundable travel expenses purchased with their card but were forced to abandon due to a positive Covid test or mandatory domestic or international quarantine. Some cards offer upgrade packages with “cancel for any reason” benefits that provide partial refunds of trip costs.
But keep in mind that credit card travel insurance typically only provides limited coverage and often covers only a portion of your total travel costs. If this limitation concerns you, consider purchasing a standalone policy with higher medical coverage limits and provisions for preexisting conditions and more adventurous activities.
How does covid cover work?
Credit card travel insurance typically provides trip interruption and lost luggage coverage, medical evacuation coverage, as well as evacuation reimbursement coverage. Terms and conditions differ between cards; typically to qualify for this coverage travel must have been paid for with the card or using loyalty points as payment; some cards also provide travel delay compensation that reimburses travellers if their flight is canceled or delayed more than 12 hours.
The type of coverage available depends on the credit card you own, with premium cards typically offering more robust and longer-lasting protection than basic cards. Unfortunately, credit card insurance only covers expenses charged directly to it, with preexisting conditions and risky travel such as trips to politically unstable areas excluded as well as preexisting medical conditions not being covered at all. Therefore stand-alone travel insurance may provide greater peace of mind during travel abroad as most primary health plans don’t cover it at all.
What is covid cover for?
Many premium credit cards provide travel protections, though the exact coverages depend on each card. For instance, Chase Sapphire Reserve’s insurance policy offers flight accident coverage which pays out a lump sum should anything happen that results in death, sight, speech or hearing impairment, limb amputation or trip cancellation/interruption coverage during travel. It also offers cruise/package tour cancellation/interruption coverage should a passenger book using their card.
Travel protection policies offered through credit cards do not typically cover situations in which trips have to be cancelled because of an outbreak or global pandemic; travel insurance typically offers more comprehensive protection in such circumstances than credit card travel protection plans do.
Your best option will depend on your travel habits and personal needs, but for added peace of mind it may be worthwhile upgrading to a credit card with enhanced protections or investing in standalone travel insurance coverage.
