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How credit card travel insurance works

Yahoo Personal Finance· Getty Images
6 min read

Credit cards offer a wide range of benefits and features, but frequent fliers may find trip insurance and travel protections to be most valuable. Depending on the card, you could have coverage for a variety of unforeseen circumstances, such as delays, interruptions, lost or damaged baggage, and more.

It's important to note, however, that these perks typically come with limitations and restrictions, so it's not always easy to get the coverage you need. Here's what to look for in the fine print.

Credit card travel insurance can come in different forms, but in most cases, you need to use your card to book your travel to get the coverage.

Many credit card trip protections are considered secondary coverage, which means that if you have another insurance policy in place — such as a personal auto or homeowner's policy — you may need to file a claim with that provider first before your card's coverage kicks in.

With that said, here's a quick summary of the different types of credit card travel insurance that you may come across.

Read more: How do travel credit cards work?

With trip cancellation and interruption insurance, your card may reimburse you for eligible nonrefundable travel expenses if your trip is canceled or cut short due to a covered reason.

Covered reasons may include medical emergencies, a death in the family, severe weather, and other unforeseen circumstances.

This coverage typically has two caps: One for each eligible traveler and another for all travelers on a single trip.

If you experience a delay due to an airline or other common carrier, your card may reimburse you for expenses such as hotel accommodations and meals.

To qualify, the delay must be significant — for example, it pushes your flight out by 12 or more hours or requires an overnight stay. Coverage is typically capped for each person on the booking.

Credit cards may offer a few types of coverage, which can cover certain costs if your baggage is delayed or if it's damaged or lost.

With baggage delay insurance, you'll typically be reimbursed for the cost of eligible items, such as toiletries and clothing, if an airline or other common carrier causes a delay of six or more hours. Coverage is typically capped per day.

If you have a lost luggage reimbursement benefit, you may receive payments to cover the cost of replacing lost or damaged items from carry-on and checked baggage. Coverage is typically capped per passenger, and you may first need to file a claim with your homeowner’s insurance policy.

Also known as rental car insurance, auto rental collision damage waiver limits or removes your liability in the event that you cause an accident while driving a rental car. This is the most common type of credit card travel insurance.

That said, credit cards typically have several limitations, including excluding certain types of vehicles and even some countries. If you're traveling within the U.S. or Canada, you'll usually need to first file a claim with your primary auto insurance provider unless your card offers primary coverage or you don't have a personal auto policy. When traveling in other countries, however, coverage is typically primary.

This rare benefit can help cover the cost of an emergency evacuation in the event that you or an immediate family member becomes injured or sick. In some cases, it could even apply if you're in an area experiencing civil unrest or severe weather.

Coverage levels are typically high, but this perk is generally only available on certain premium travel credit cards.

Another premium credit card perk, emergency medical and dental protection can provide reimbursement for certain medical expenses if you're far enough from home that your primary health insurance plan doesn't cover you — usually 100 miles or more.

Note, however, that coverage limits are relatively small.

If you or someone in your party gets in an accident while traveling, this acts as accidental death and dismemberment coverage. In many cases, the coverage goes up to $1 million, with different limits depending on the covered injury.

Read more: Save big on your next vacation with a travel credit card

Credit card travel insurance is typically administered by a third-party provider called the benefits administrator. You can get the phone number, as well as instructions on how to file a claim, from the benefits guide you received with your credit card.

If you no longer have the benefits guide or can't find it, call the number on the back of your card to get the information you need to get started. Note that most types of credit card travel insurance offer reimbursement, so you'll typically have to pay for the expense out of pocket first.

The claims process will vary depending on the type of coverage you have, but you'll typically need to provide details about your situation and documentation, such as a flight delay or cancellation confirmation, medical bills, receipts for eligible purchases, or claim details from your primary insurance provider.

Many credit cards offer trip insurance in one form or another, but some credit cards offer more than others. Here are some of the best travel credit cards for insurance benefits.

The Chase Sapphire Reserve offers an impressive array of trip protections, including:

  • Primary auto rental collision damage waiver

  • Trip cancellation and interruption insurance

  • Trip delay reimbursement

  • Travel accident insurance

  • Lost luggage reimbursement

  • Baggage delay insurance

  • Emergency evacuation and transportation

  • Emergency medical and dental benefit

The travel card also offers several other premium perks, but it also comes with a hefty $550 annual fee.

If you want a more modest annual fee, you can't go wrong with the Chase Sapphire Preferred, which offers:

  • Primary auto rental collision damage waiver

  • Trip cancellation and interruption insurance

  • Trip delay reimbursement

  • Baggage delay insurance

The card charges a modest $95 annual fee and also comes with a versatile rewards program and great rewards rates on everyday spending categories.

If you're looking for an airline credit card, look no further than the United Explorer Card, which offers the following travel protections:

  • Primary auto rental collision damage waiver

  • Trip cancellation and interruption insurance

  • Trip delay reimbursement

  • Baggage delay insurance

  • Lost luggage reimbursement

The card charges a $0 intro annual fee the first year, then $95 after that, and also offers great benefits when you fly with United Airlines.

If you want a cash-back credit card with great trip protections, the Prime Visa is a surprising but solid choice. The card offers the following:

  • Secondary auto rental collision damage waiver

  • Travel accident insurance

  • Baggage delay insurance

  • Lost luggage reimbursement

The card has no annual fee and offers great rewards on purchases with Amazon.com and Whole Foods Market.

Read more: Are travel credit cards worth it?

If you're a frequent traveler, having a credit card with great travel insurance benefits can give you some peace of mind when you venture somewhere new.

That said, trip protections are just one of many benefits that credit cards provide, and it's important to compare each card based on all of its features, including rewards and other perks. If you're traveling abroad, it may also make sense to purchase travel insurance that offers more comprehensive coverage.

This article was edited by Alicia Hahn

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