Best Credit Cards for Travel Insurance
By Eva Norlyk Smith Ph.D.
April 13, 2012
For many rewards junkies, credit card travel rewards are synonymous with free airline tickets, free checked bags, priority boarding, free companion tickets or even free airport lounge access.
Amid these flashy rewards, one important benefit is often overlooked – free travel insurance protection. While not as exciting as VIP lounge access, travel insurance can save your trip if your carefully laid plans go awry.
The availability of travel insurance varies tremendously from issuer to issuer. While protections like travel emergency assistance are common, far fewer credit cards come with benefits like trip interruption insurance or lost baggage protection. Further, most issuers offering additional travel insurance protection offer them only on some of their credit cards. And many issuers extend them only to those with good credit histories. That's why it's important to do your homework first. (See “Credit cards offering travel insurance protection” table below.)
“Before relying on this type of insurance, find out exactly what's covered, says Linda Kundell, a spokeswoman for the U.S. Travel Insurance Association. “What happens if you have to cancel your trip if you or a family member is ill? What happens if you're caught in a storm or natural disaster? Contact your credit card company to find out exactly what they do and what they do not cover.”
Here are some of the more common travel insurance protections and services offered by some credit cards – and some common exclusions to watch out for. Once you know what you're looking for, use the chart below to browse for benefits.
Travel emergency assistance: Should you encounter a travel emergency overseas (or in some cases even just 100 miles from home), your card issuer's global assistance hotline can function as a lifeline to assist you. Services provided include referrals to physicians or hospitals, emergency medical transportation and payment of emergency medical expenses. Some card issuers' global assistance services will even function as a liaison to communicate with family members or business associates. The emergency hotline service can also make arrangements for return travel, which might include a medical or non-medical escort, an ambulance or wheelchair assistance..
The catch: While most credit cards offer complimentary travel and emergency assistance, cardholders generally pay for all services provided by third parties, such as doctors and attorneys
Travel accident insurance: Credit cards with automatic travel accident insurance essentially function like free life insurance policies. The policy covers you in the event of accidental death or dismemberment while you're traveling by airplane, train, bus, cruise ship or other common carrier. The amount of the travel accident insurance benefit varies among issuers, but typically ranges from $100,000 to $250,000.
The catch: Coverage is only for travel, not for accidents to and from work. In addition, only accidental death or dismemberment during transportation is covered. So if you suffer a heart attack while bungee jumping, for example, the benefit does not apply.
Trip cancellation insurance: Credit cards with trip cancellation insurance are harder to come by. Yet this is one of the most useful protections. Cards with trip cancellation insurance typically will reimburse cardholders up to $2,500 to $3,000 (depending on the card), if they have to cancel a trip before the departure date.It's hard to imagine deliberately canceling your dream trip. But, if your traveling companion breaks a leg a week before departure, or if a close family member dies the day before you leave, trip cancellation insurance can prevent you from losing all the money you've invested.
The catch: The delay or cancellation must be caused by a covered reason, such as sickness, injury or death of you, a family member or traveling companion. In the case of an injury or illness, you may be required to provide proof from a physician that your condition prevents you from traveling. The benefit does not extend to trip cancellations caused by pre-existing medical conditions – any health conditions you had before you booked the trip.
Trip delay insurance: A delayed or canceled flight can end up costing you a lot. You might have to pay for a hotel or extra meals, for example, or pay for a bus to catch up with the group tour you were late for.
Some credit cards, therefore, provide trip delay coverage for hotel stays, meals and other expenses incurred due to travel delays.
The catch: There's a lot of fine print when it comes to trip delay coverage. For example, some cards cover flight cancellations or delays due to inclement weather — but many don't. Cards will also often specify the length of the delay that's required for coverage to kick in – 12 hours, for example.
Baggage loss or delay coverage: If your luggage or personal items are lost, damaged or stolen, credit cards with lost luggage coverage will pay for repairs, or for the replacement of your lost items up to a specified amount.
For some credit cards, the baggage loss protection extends to baggage delays. That means, if your baggage arrives at your destination well after you do, your card will cover the cost of emergency purchases of essential items.
The catch: Not all personal items are covered, and the protection doesn't kick in until you've filed claims with the travel carrier and, in some cases, your home insurance. And, like travel delay coverage, baggage delay coverage often requires a minimum delay – generally 18 hours.
Remember, terms vary from issuer to issuer, so be sure to read the fine print and familiarize yourself with the exclusions and the conditions. Keep in mind that, for the coverage to be provided for a trip, it must have been paid for in full with the card supplying the benefits.
To find out which cards provide the benefits you want, use the following chart. Simply select a benefit to bring up a list of cards that include it. Keep in mind that your ability to qualify for these cards, their benefits and the lowest annual percentage rates (APRs) will depend on your creditworthiness. For full terms and conditions, always refer to your individual cardholder agreement.