Last Updated: November 6, 2018January 17, 2024
Many travel credit cards include trip insurance to attract new members and provide existing cardholders with peace of mind and valuable protection while 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, and how it compares to third-party travel insurance.
What is Covered By Credit Card Travel Insurance?
The best travel credit cards come with travel insurance coverage that addresses the most common concerns of travelers. From lengthy delays to serious injuries, credit cards can offer travel insurance benefits that cover some of the most common travel disruptions.
Below are some of the most common travel insurance benefits offered by credit cards.
Cancellation Benefits
Trip Cancellation coverage is one of the main reasons travelers buy travel insurance, , and many popular travel credit card issuers include this coverage as part of their package of perks.
Typically, Trip Cancellation insurance can reimburse travelers their prepaid, non-refundable travel expenses if they are forced to cancel their trip for a covered reason, such as an illness, injury, or death in the family. Certain plans will also cover additional events such as severe weather, natural disasters, and terrorism.
There are two primary differences between Trip Cancellation coverage offered by credit cards and third-party insurance companies:
- Most credit cards only cover trips purchased on that card up to a specified amount, typically between $1,500 and $10,000 per trip. Most third-party travel insurance can cover 100% of prepaid and non-refundable trip costs, regardless of the cost.
- Some third-party policies offer the Cancel For Any Reason upgrade, which partially refunds travelers who cancel for a reason that is not otherwise covered by their policy. This is not an option when getting travel insurance through a credit card.
Medical Benefits
Since most primary healthcare plans don’t over coverage overseas, many travelers turn to travel insurance to cover any unexpected medical expenses that arise during their trip. Travel medical insurance can typically cover ambulance rides, hospital bills, and emergency evacuations.
Unfortunately, only a small number of travel credit cards offer medical insurance to their cardholders. Those that do provide this card benefit typically offer low coverage. If medical coverage is important to you, Squaremouth recommends considering a trusted travel insurance provider.
Travelers can purchase insurance plans that include high Emergency Medical and Medical Evacuation coverage without breaking the bank. On average, travel medical insurance plans from third-party providers cost roughly $90.
Luggage Benefits
Lost luggage can put a damper on any trip. Luckily, many travel credit cards offer strong coverage for personal items that get lost, stolen, or damaged during a trip.
Upon reviewing popular travel rewards credit cards, many offer up to $3,000 in baggage insurance. While a select few third-party travel insurance policies can cover up to $3,000, most offer between $250 and $1,000.
Although credit cards tend to offer a higher benefit amount, this coverage is usually limited to items that are lost or damaged while traveling with a common carrier, such as an airline. Third-party policies can cover items that are lost at any point during a trip.
Most third-party travel insurance plans also include Baggage Delay coverage, which can cover the cost of toiletries, clothing, and other necessities if your luggage doesn’t arrive to your destination on time.
Delay Benefits
Credit cards and third-party policies offer comparable coverage to reimburse travelers for meals and hotel accommodations during a significant delay. The Travel Delay coverage varies by policy, and eligibility is given once a specific period of time has passed, typically 3-12 hours.
Trip delay reimbursem*nt also varies by plan. Most credit card insurance plans will provide but is between $100 and $1,000 per traveler. With that said, it’s important to make all meal and accommodation purchases with the credit card that offers the travel benefits.
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
- Fee: $695
- Trip Protection & Trip Interruption: Up to $10,000 per trip
- Travel Accident: N/A
- Travel Delay: $500 per ticket, 6-hour delay minimum
- Baggage Delay: N/A
- Baggage & Personal Item Loss: Up to $3,000 per passenger
- Rental Car Coverage: Up to $75,000
Chase Sapphire Reserve®
- Annual Fee: $550
- Trip Protection & Trip Interruption: $10,000 per person, $20,000 per trip
- Travel Accident: Up to $1,000,000
- Travel Delay: $500 per ticket, 6-hour delay minimum
- Baggage Delay: $100 per day for five days
- Baggage & Personal Item Loss: Up to $3,000 per passenger
- Rental Car Coverage: Up to $75,000
Capital One Venture X Rewards
- Annual Fee: $395
- Trip Protection & Trip Interruption: $2,000 per person
- Travel Accident: N/A
- Travel Delay: $500 per ticket, 6-hour delay minimum
- Baggage Delay: N/A
- Baggage & Personal Item Loss: Up to $3,000 per passenger
- Rental Car Coverage: Up to $75,000
Chase Sapphire Preferred®
- Annual Fee: $95
- Trip Protection & Trip Interruption: $10,000 per person, $20,000 per trip
- Travel Accident: Up to $500,000
- Travel Delay: $500 per ticket, 12-hour delay minimum
- Baggage Delay: $100 per day for five days
- Baggage & Personal Item Loss: Up to $3,000 per passenger
- Rental Car Coverage: 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, 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.
Cost
For credit card holders, the cost of built-in travel protection is already included in the card’s annual fee. This often ranges from $95 to $450 per year, depending on the card.
Typically, a comprehensive travel insurance policy, with coverage for cancellations, medical emergencies, trip delays, and luggage, will cost between 5% and 10% of your total trip cost. On average, single trip travel insurance policy cost travelers just over $300.
Coverage
While using your card’s travel protection benefit may be less expensive than purchasing a third party travel insurance policy, it’s not always the best option. Credit card travel insurance will only cover purchases made on your credit card, which can limit what can be reimbursed in the event you need to file a claim.
Credit cards also offer limited medical coverage, if any at all. For travelers looking for insurance that covers medical treatment abroad, it’s best to look at other options outside of your credit card.
Keep in mind that travelers are able to stack a third party travel insurance policy on top of their existing credit card travel protection for added coverage. In any event, assessing your needs and comparing travel insurance plans before your trip is the best way to guarantee you get the best policy at the best price.
Choice
When it comes to travel insurance, the more options there are, the better chance you have at finding a policy that meets your needs. While credit cards may offer travel protection, they don’t always offer more than one option. Luckily for travelers, shopping around for a policy is easier than ever before.
Outside of credit card travel protection, there are hundreds of other policies that offer varying degrees of coverage for travelers. For example, travelers concerned with getting injured during their trip can find policies that offer much higher medical coverage than even the best credit cards can offer. Other policies may also cover specific activities like scuba diving and hang gliding that may be excluded from most credit card protection plans.
