Squaremouth’s Guide to Credit Card Travel Insurance
Many travel credit cards include trip insurance to attract new members and provide existing cardholders with peace of mind when taking a trip. While this built-in coverage can be limited, it may be perfect for travelers that have lower trip costs or are heading to low-risk destinations.
As indicated by Forbes, travel insurance coverage can vary dramatically from one credit card to the next. Squaremouth breaks down credit card travel insurance, what it covers, and how it compares to third-party travel insurance.
How Does Credit Card Travel Insurance Work?
Credit card travel insurance is a popular perk that’s offered by many travel credit cards. This trip protection can provide you with reimbursement for unexpected travel expenses if your trip is disrupted by events out of your control, such as inclement weather, illness, or natural disasters.
The extent of financial protection you’re eligible for will depend on a wide-range of factors, such as the card you own, how you paid for your trip, and the circumstances surrounding your financial loss.
While some travel cards are free to attain, the cards that offer the highest level of coverage usually require an annual fee, which can range between $50-$700. To be approved for a travel credit card, the issuer may also need to verify that your credit score meets their minimum threshold.
What Does Credit Card Travel Insurance Cover?
The best travel credit cards address the most common concerns of travelers. From lengthy delays to last-minute cancellations, credit cards can offer travel insurance benefits that can protect you from the time you depart for your trip to the time you return.
Below are some of the most common travel insurance benefits offered by credit cards.
Cancellation Benefits
Many popular travel credit cards offer Trip Cancellation and Trip Interruption insurance. These benefits are designed to protect your prepaid, non-refundable travel expenses in the event you’re forced to cancel or end your trip early due to a covered reason.
Commonly covered cancellation reasons include unexpected injuries, illness, severe weather events, or death of an immediate family member.
It’s important to note that most credit card issuers will only reimburse you for trip payments made using the card. For that reason, it’s crucial that you pay for your flights, hotels, and other bookings using the card that offers the travel benefits.
Luggage Benefits
Lost luggage can put a damper on any trip. Luckily, many travel credit cards offer strong coverage for luggage that gets lost, stolen, or damaged during a trip.
Credit card travel insurance can also provide financial coverage if your luggage is delayed by a common carrier en route to your destination. This coverage typically will reimburse you if you need to purchase clothes and toiletries while you wait for your baggage to arrive.
Delay Benefits
Roughly a quarter of all flights in the United States are delayed. During significant delays, you may need to purchase food or overnight accommodations as you await your new departure time.
Many credit cards offer trip delay reimbursement that covers these unexpected costs. Eligibility for this benefit can vary depending on the card, but coverage typically kicks in once a specific period of time has passed, usually 3-12 hours.
Other Travel Benefits
In addition to the perks listed above, it’s possible your credit card issuer may offer extra benefits to support you as you travel. Examples of unique card benefits to keep an eye out for include:
- Airport lounge access
- Rental car insurance
- 24-hour emergency assistance
- Emergency cash transfers
- Concierge service
- Hotel credit
What is Not Covered by Credit Card Travel Insurance?
While credit cards are known to offer helpful benefits such as trip cancellation insurance and lost luggage reimbursement, they do lack one critical element; medical protection.
Since most primary healthcare plans don’t offer coverage overseas, many travelers turn to travel insurance to cover any unexpected medical expenses that arise during their trip. Unfortunately, this type of coverage is not commonly found in credit cards. If it is offered, coverage is usually very limited.
For that reason, it’s still strongly recommended to purchase a travel insurance policy that includes medical coverage, particularly plans with strong Emergency Medical, Medical Evacuation, and Accidental Death and Dismemberment protection.
Which Credit Cards Offer Travel Insurance?
Travel protection has become a popular differentiating factor for many credit cards, especially as the cost of travel continues to rise.
Below are a handful of popular credit cards at different price points that offer travel protection, as well as their coverage limits at the time this article was written.
| The Business Platinum Card From American Express | Chase Sapphire Reserve® | Capital One Venture X Rewards | Capital One Venture X Rewards | |
| Annual Fee | $695 | $550 | $395 | $95 |
| Trip Protection | $10,000 per trip | $10,000 per person, $20,000 per trip | $2,000 per person | $10,000 per person, $20,000 per trip |
| Trip Interruption | $10,000 per trip | $10,000 per person, $20,000 per trip | $2,000 per person | $10,000 per person, $20,000 per trip |
| Accidental Death & Dismemberment | N/A | $1,000,000 | N/A | $500,000 |
| Travel Delay | $500 per ticket, 6-hour delay minimum | $500 per ticket, 6-hour delay minimum | $500 per ticket, 6-hour delay minimum | $500 per ticket, 12-hour delay minimum |
| Baggage Delay | N/A | $100 per day for five days | N/A | $100 per day for five days |
| Baggage Loss | $3,000 per passenger | $3,000 per passenger | $3,000 per passenger | $3,000 per passenger |
| Rental Car Coverage | $75,000 | $75,000 | $75,000 | Up to the actual cash value of the car |
The above list is not a complete list of credit cards with travel insurance, but it does illustrate similarities and differences among cards at different annual fees. Most travel credit cards also come with additional perks like hotel credit, rewards, concierge services, and airport lounge access.
Credit Card Travel Insurance vs. Third-Party Travel Insurance
If you currently have travel protection from your credit card, you may not need additional coverage from a travel insurance policy.
However, if you’re insuring an expensive or adventurous trip, a comprehensive travel insurance policy from a third-party provider is still something to consider. Below we compare the differences between the two types.
| Credit Card Travel Insurance | Third-Party Travel Insurance | |
| Cost | Most travel credit cards require an annual fee, typically between $50-$700 | Travel insurance can be purchased for less than $100, but typically average around $300 per trip |
| Choice | Credit cards only provide one policy option to cardholders | Most providers offer multiple plans that offer varying degrees of coverage |
| Trip Costs | Credit cards will only protect expenses made through the credit card | Travel insurance plans can protect any trip investment, regardless of how it was made |
| Cancellation Coverage | Cards will provide a set reimbursement limit for trip cancellations and interruptions | Comprehensive insurance plans typically reimburse 100% of trip costs for covered cancellations or interruptions |
| Cancel For Any Reason | No credit card offers CFAR | Certain providers offer CFAR as an optional add-on at checkout |
| Medical Coverage | Credit cards typically do not provide medical coverage | Almost all travel insurance policies provide coverage for medical emergencies and evacuations |
| Delay Coverage | Most credit card insurance plans will provide between $100 and $1,000 per traveler after a 6-12 hour delay | Travel insurance delay coverage ranges from $250-$2,000 and may begin after a 3 hour delay |
| Luggage Protection | Many offer up to $3,000 in baggage insurance | Providers usually offer between $500-$3,000 in luggage protection |
What Type of Travel Insurance is Right for You?
To put it simply, credit cards are great for protecting some or all of your trip expenses, assuming they were made on your card. They can also provide great protection for your personal belongings while you travel.
Third-party insurance providers, however, are able to offer more options and coverage to travelers that need it. The key differentiator between credit card travel insurance and a policy you can purchase online is medical coverage. If you want health insurance while you travel, you may want to start comparing options.
No matter what you decide, it never hurts to compare your options for you leave for your trip. It’s not only free to shop, but you may find that travel insurance is more affordable than you expected.
Final Thoughts
Credit card travel insurance is a valuable benefit that provides essential protections for cardholders on the go. It can help mitigate the financial impact of unexpected trip cancellations, delays, or lost luggage, offering peace of mind to travelers at no additional cost beyond the card’s annual fee.
However, credit card travel insurance is not a one-size-fits-all solution. Coverage varies widely between cards, and most lack critical protections like robust medical coverage or evacuation benefits. For travelers planning expensive or international trips, or those seeking comprehensive coverage, a third-party travel insurance policy may offer a better solution.
Ultimately, the decision comes down to your travel habits and risk tolerance. Carefully review your credit card’s insurance benefits and compare them to third-party options to ensure you’re adequately protected for your journey.