Squaremouth’s Guide to Credit Card Travel Insurance
Many credit cards include travel insurance to attract new travelers and protect existing cardholders that are spending money on trips. While this built-in coverage can be limited, it may be perfect for travelers that have lower trip costs or are heading to destinations with lower risk.
Travel insurance coverage can vary dramatically from one travel card to the next. Depending on each traveler and their trip, this built-in coverage may be exactly what they need, or it may not provide the right benefits or coverage amounts. Squaremouth breaks down credit card travel insurance, and how it compares to third-party travel insurance.
What is Covered By Credit Card Travel Insurance?
Many travel credit cards come with travel insurance coverage that addresses the most common concerns of travelers. From lengthy delays to serious injury, credit cards can offer travel insurance benefits that cover some of the most common travel disruptions.
Cancellation Benefits
Trip Cancellation coverage is one of the main reasons travelers buy travel insurance. Many popular travel credit cards include this coverage as part of their package of perks, covering canceled trips for reasons such as illness, injury, death, inclement weather, or terrorism, among others.
There are two primary differences between Trip Cancellation coverage offered by credit cards and third-party providers:
- Most credit cards only cover trips purchased on that card, typically between $1,500 and $10,000 per trip, while third-party travel insurance can cover 100% of prepaid and non-refundable trip costs.
- 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
Medical Benefits
The biggest difference between credit card travel insurance and third-party travel insurance is medical coverage. Only some credit cards include medical coverage, and it’s typically a low benefit amount.
Most third-party policies offer a higher amount of comprehensive medical coverage. With a third-party policy, the medical benefits typically start at $10,000 for Emergency Medical and $100,000 for Medical Evacuation.
Luggage Benefits
Credit cards often offer more coverage for lost or damaged luggage, typically reimbursing up to $3,000. 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.
Delay Benefits
Credit cards and third-party policies offer comparable coverage to reimburse travelers for meals and hotel accommodations during a delay. This Travel Delay coverage varies by policy, but is often between $100 and $1,000 per traveler.
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, travel delays, and luggage, will cost between 5% and 10% of your total trip cost. In 2022, the average comprehensive policy cost travelers $312.
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.