Travel Insurance Through Credit Cards: What You Need to Know
You planned the trip of a lifetime months ago, but you end up hospitalized the morning you’re due to fly to your destination. Or, you arrive at your vacation spot, but your luggage is nowhere to be found.
Before you write your adventure off as a financial loss or go into panic mode, think about how you paid for your trip. If you use your credit card, your luck may soon improve.
Some accounts offer benefits that protect travelers. Keep reading to learn more about credit card travel insurance.
What Is Credit Card Travel Insurance?
Travel insurance can protect your wallet should an unpleasant and unforeseen situation occur during your trip, such as lost luggage, a delayed flight, or an injury. Typically, your policy will reimburse you for expenses you incur due to a covered event up to a predetermined limit. The insurance may also include coordination services, such as help arranging medical treatment after a travel accident.
Some adventurers purchase a separate travel insurance policy before their excursion. However, your credit card may offer some protections for no additional cost – provided you use your account to book and pay for your journey.
Common Credit Card Travel Insurance Coverage
While policies will vary by card, here’s what is commonly included in credit card travel insurance coverage:
Trip Cancellation and Interruption Insurance
The situation: You need to cancel your trip or end it early due to a covered event, such as illness, severe weather, or a court subpoena you can’t postpone.
The solution: You can get reimbursed for the flights and reservations you didn’t use up to your policy limit.
Trip Delay Insurance
The situation: Your flight is extremely delayed or canceled, leaving you stranded at the airport for hours – or even days.
The solution: You can get reimbursed for covered costs incurred due to the delay or cancellation, such as a hotel stay or a restaurant meal.
Rental Car Insurance
The situation: You declined the rental company’s collision damage waiver (CDW) and got into an accident in your rental car – or the vehicle got stolen.
The solution: You can file a claim to cover the repair or replacement cost of the car.
Lost or Delayed Baggage Insurance
The situation: You make it to your destination on time, but your checked luggage doesn’t.
The solution: You can receive reimbursement for essential items, like clothing and toiletries, while you wait for your bags to arrive. If you never get your luggage back, you can receive reimbursement for the replacement value of the bag and its contents.
Travel Accident Insurance
The situation: You or your spouse, domestic partner, or dependent child get into an accident while traveling that results in death, loss of eyesight, or loss of a limb(s).
The solution: You can receive a cash payout up to the limit defined in the policy.
A general note about credit card travel insurance: Each insurance policy has its own coverage eligibility criteria, limits, and exclusions. For instance, car rental insurance typically doesn’t include liability coverage. Review your card’s terms and conditions before booking your trip and opting out of other insurance.
Top Cards That Provide Travel Insurance
Here are four of the best options for travelers on the market currently:
Chase Sapphire Preferred® Card
Annual fee: $95
Rewards: Enjoy benefits such as 5x on travel purchased through Chase Travel℠, 3x on dining, select streaming services and online groceries, 2x on all other travel purchases, 1x on all other purchases, $50 Annual Chase Travel Hotel Credit, plus more.
Welcome bonus: Earn 100,000 bonus points after you spend $5,000 on purchases in the first 3 months from account opening.
Travel insurance highlights:
Trip cancellation and interruption: Up to $10,000 per covered traveler and up to $20,000 per trip to cover prepaid non-refundable eligible travel expenses
Auto rental: Up to $60,000 reimbursement for theft or collision of a rental vehicle with an MSRP of $125,000 or less
Baggage delay: Up to $100 per day for up to five days to reimburse you for replacing essentials like clothing if your luggage gets delayed for more than six hours
Chase Sapphire Reserve® Card
Annual fee: $550 plus $75 for each authorized user
Rewards: Earn 5x total points on flights and 10x total points on hotels and car rentals when you purchase travel through Chase Travel℠ immediately after the first $300 is spent on travel purchases annually. Earn 3x points on other travel and dining & 1 point per $1 spent on all other purchases.
Welcome bonus: Earn 60,000 bonus points after you spend $5,000 on purchases in the first 3 months from account opening.
Travel insurance highlights:
Trip cancellation and interruption: Up to $10,000 per covered traveler and up to $20,000 per trip to cover prepaid non-refundable eligible travel expenses
Trip delay: Up to $500 per covered traveler if the trip is delayed by more than six hours or requires an overnight stay
Lost luggage reimbursement: Up to $3,000 per covered traveler to repair or replace lost, damaged, or stolen baggage
Baggage delay: Up to $100 per day for up to five days to reimburse you for replacing essentials like clothing if your luggage gets delayed for more than six hours
Auto rental: Up to $75,000 reimbursement for theft or collision of most domestic and international rental vehicles
Travel accident: Up to $1,000,000 in accidental death and dismemberment (AD&D) coverage
Emergency evacuation and transportation: Up to $100,000 to cover transportation and medical care if you’re more than 100 miles from home and require emergency medical evacuation
Emergency medical and dental: Up to $2,500 to cover medical expenses if a covered traveler gets sick or injured more than 100 miles from home
Roadside assistance: Up to $50 worth of help covering tows, battery problems, tire changes, lock issues, and gas replenishment (maximum four times per year)
The Platinum Card® from American Express®
Annual fee: $695
Rewards: Earn 5X Membership Rewards® Points for flights booked directly with airlines or with American Express Travel up to $500,000 on these purchases per calendar year. Earn 5X Membership Rewards® Points on prepaid hotels booked with American Express Travel.
Welcome bonus: Earn 80,000 Membership Rewards® Points after you spend $8,000 on eligible purchases on your new Card in your first 6 months of Card Membership.
Travel insurance highlights:
Car rental loss and damage: Up to $75,000 in coverage if your rental car is damaged or stolen in a covered territory
Trip cancellation and interruption: Up to $10,000 reimbursement per trip and up to $20,000 reimbursement per eligible card in a 12 consecutive month period
Trip delay: Up to $500 per trip if the trip is delayed by more than six hours or requires an overnight stay (maximum of two claims in a 12 consecutive month period)
Capital One Venture X Rewards Credit Card
Annual fee: $395
Rewards: Earn unlimited 10X miles on hotels and rental cars booked through Capital One Travel. Earn 5X miles on flights booked through Capital One Travel, and unlimited 2X miles on all other purchases.
Welcome bonus: Earn 75,000 bonus miles when you spend $4,000 on purchases in the first 3 months from account opening, equal to $750 in travel.
Travel insurance highlights:
Auto rental collision damage waiver: Up to $75,000 in coverage if your rental car is damaged or stolen
Trip cancellation and interruption: Up to $2,000 per insured person for non-refundable tickets
Trip delay: Up to $500 for each purchased ticket if your delay is longer than six hours or involves an overnight stay
Travel accident: Up to $1,000,000 in coverage if a covered traveler dies or loses their eyesight, hearing, or powers of speech
Lost luggage: Up to $3,000 reimbursement if your baggage is lost due to theft or carrier misdirection
How to Tell if Your Credit Card’s Travel Insurance Is Enough
Your travel insurance needs are unique and based on factors such as your risk tolerance, financial standing, and overall health. We spoke with R.J. Weiss, certified financial planner (CFP®) and founder of The Ways to Wealth, to get professional insight from a seasoned traveler.
Weiss said, “While the specifics depend on the credit card, most credit card travel insurance is relatively basic and offers more limited coverage compared to policies from dedicated travel insurance providers. That said, this level of coverage is often enough for many people. For me, it’s why I typically don’t purchase separate travel insurance and instead make sure to use the right credit card—my Chase Sapphire Reserve®—when traveling.”
“I always like to think of insurance, regardless of the type, as a way to protect against worst-case scenarios. So, if you’re in a financial situation where you can handle a worst-case scenario, I wouldn’t necessarily purchase additional insurance. If not having travel insurance—or if what the credit card provider offers isn’t enough—has the potential to cause significant financial harm, I’d look into alternative coverage,” continued Weiss.
Frequently Asked Questions
Do Credit Cards Automatically Have Travel Insurance?
Credit cards don’t automatically have travel insurance. Some cards include this benefit, while others do not. Review your card’s benefits guide and terms and conditions to see what coverage you may have.
Which Credit Card Has the Best Travel Benefits?
The credit card with the best travel benefits depends on your needs, preferences, and budget. For instance, the Chase Sapphire Reserve® offers more robust protection than the Chase Sapphire Preferred®, but its annual fee is more than five times higher.
Do You Have to Activate Credit Card Travel Insurance?
“You don't necessarily need to activate travel insurance on your credit card, but it depends on the specific card. Generally, you do need to use the card to book at least part of your travel for the insurance to apply. Coverage limits might be capped based on how much you spend on the card for the travel you purchased,” said Weiss.
