Airline Insurance: Credit Card Coverage For Travelers

Credit cards can provide peace of mind when it comes to travel insurance, reimbursing you for a trip delay, interruption or cancellation, as well as for baggage that's been delayed or lost. However, the insurance coverage offered varies from one card to another. The most common type of insurance coverage provided by a credit card is personal accident insurance, which covers accidental death and dismemberment.

Credit cards may also offer:

- Purchase protection insurance

- Insurance against fraudulent transactions and theft

- Lost baggage insurance

- Rental car insurance

- Travel medical and evacuation insurance

Trip cancellation and interruption

This type of insurance covers you if your travels are cancelled or cut short due to unforeseen circumstances, like a medical emergency or a death in the family. You may also be able to get reimbursed for expenses related to getting home, like a cab to the airport.

The specific terms of trip cancellation and interruption insurance vary depending on the credit card company. For example, Chase credit cards will reimburse you for up to $10,000 per covered person, with a maximum of $20,000 per trip. Meanwhile, Capital One Venture X Rewards Credit Card offers up to $2,000 per eligible person if your trip is cancelled or interrupted due to a covered reason.

It's important to note that trip cancellation and interruption insurance does not usually cover travelling companions unless they are immediate family members. Additionally, this type of insurance is secondary, meaning that if the airline provides vouchers for food or a hotel, you cannot file a claim with your credit card company.

To file a claim, contact your credit card issuer by phone or online. You will typically need to submit your claim within 20 to 60 days of the cancellation and provide documentation such as receipts, doctor's notes, and weather advisories.

Lost or damaged luggage

If you're one of the unlucky travellers who finds themselves at their destination without their baggage, having paid for your flight with a credit card that features lost luggage reimbursement can soften the blow. Many credit cards offer lost luggage protection, and this benefit is usually provided by Visa, Mastercard, and American Express.

Lost luggage insurance covers the cost of repairing or replacing your luggage and its contents if they are lost or damaged during a covered trip. This typically includes checked baggage and carry-on luggage, and their contents, but each card will also have a list of exclusions. For example, Amex does not cover cash, cards, travel documents, securities, tickets, plants, consumables, eyewear, or medical aids.

Lost luggage insurance will usually cover the difference between the cash value of your luggage and its contents, and any reimbursement from the airline or travel provider. Coverage usually lasts from check-in to baggage pick-up at the end of your journey.

If your luggage is lost or damaged, the first thing to do is report it to the airline or travel provider. You will then need to contact your credit card issuer or benefits administrator, who will send you a claim form to fill out and attach any requested documentation.

Different credit card issuers will have different policies, and the level of coverage will vary between cards. For example, American Express cards cover the cardholder, their spouse or partner, and children under the age of 23, with checked baggage covered up to $500 per person, and carry-on baggage covered up to $1,250 per person. High-risk items like jewellery, sporting equipment, and electronics are covered up to $250. The Platinum Card and the Business Platinum Card from American Express offer increased coverage of up to $2,000 for checked baggage, and a combined maximum of $3,000 for checked and carry-on baggage per person per covered trip.

Some Chase credit cards, including the Sapphire Reserve and the Sapphire Preferred, offer reimbursement for the difference between the actual value of your luggage and its contents, and any reimbursement from the airline or travel provider, up to a maximum of $3,000 per covered person, with a sublimit of $500 for cameras, electronic equipment, jewellery, and watches.

After making a claim, your credit card issuer may ask you to submit further documentation. Requirements and time periods can vary between issuers, so it's best to check directly with them.

Rental car insurance

Understanding Your Credit Card's Rental Car Coverage

To determine if your credit card provides rental car insurance, you can start by calling the phone number on the back of your card and speaking to the issuer. Alternatively, you can refer to the "guide to benefits" provided by your card issuer, which should outline the details of your coverage. Understanding the following aspects of your rental car coverage is crucial:

• Primary vs. Secondary Coverage: Primary coverage is preferable because it means your credit card insurance pays out first, and you won't need to involve your personal auto insurance provider. Secondary coverage, which is more common, means your personal auto insurance pays first, and your credit card coverage kicks in afterward, often reimbursing your deductible and other costs not covered by your primary policy.
• Eligibility Requirements: To ensure your rental car is covered, you typically must pay for the rental in full with the eligible credit card and decline the rental car company's collision damage waiver (CDW) or loss damage waiver (LDW). The driver at the time of any incident must also be listed on the rental agreement.
• Coverage Inclusions and Exclusions: Credit card rental coverage usually includes protection against damage to or theft of the rental vehicle, towing expenses, and administrative fees. However, it often excludes liability concerns, such as damage to other property or injuries to other people. Additionally, certain types of vehicles, like luxury cars or motorcycles, may not be covered.
• Geographic Limitations: Your credit card's rental car coverage may not apply in all countries. For example, Visa and Mastercard typically exclude rentals in Israel, Jamaica, and Ireland, while American Express excludes Italy, Australia, and New Zealand.
• Rental Duration Limits: The coverage period for rental cars is usually limited, such as 15 consecutive days in your home country or 31 days outside of it.

Credit Cards with Primary Rental Car Coverage

If you're seeking primary rental car coverage, several popular travel credit cards offer this benefit. Here are some notable options:

• Chase Sapphire Preferred® Card: This card provides primary rental car coverage for rentals of up to 31 consecutive days worldwide. It covers losses, including physical damage and theft of the rental vehicle, valid loss-of-use charges, and towing charges.
• Chase Sapphire Reserve®: The premium version of the Sapphire card offers similar primary rental car coverage, along with other premium travel benefits.
• United℠ Explorer Card: This card offers primary rental car coverage with a $0 introductory annual fee for the first year, then $95 annually.
• Capital One Venture X Rewards Credit Card: With a $395 annual fee, this card provides primary rental car coverage for up to 31 days.

Credit Cards with Secondary Rental Car Coverage

Most credit cards, including some of the best travel credit cards, offer secondary rental car coverage. This means their coverage kicks in after your personal auto insurance policy. Here are some notable cards with secondary rental car coverage:

• American Express Cards: American Express cards generally offer secondary rental car coverage, but you can purchase their Premium Car Rental Protection policy, which provides primary coverage for a small fee per rental period. This option offers excellent value, especially for longer rentals.
• PenFed Platinum Rewards Visa Signature® Card: This card offers secondary auto collision damage waiver (CDW) coverage, reimbursing you for theft or damage to the rental vehicle, administrative fees, and towing charges. Coverage is available for up to 15 days within your country of residence or 31 days outside the U.S.
• Blue Cash Preferred® Card from American Express: This card provides secondary auto collision damage waiver coverage for up to 30 consecutive days, protecting against theft or damage to the rental vehicle.
• American Express® Gold Card: The American Express® Gold Card offers secondary auto collision damage waiver coverage for up to 30 consecutive days, covering theft or damage to the rental vehicle.

When to Use Rental Car Insurance from Your Credit Card

Using your credit card's rental car insurance instead of purchasing additional insurance from the rental company can save you a significant amount of money. However, it's essential to understand when this coverage applies. Here are some scenarios where using your credit card's rental car insurance is beneficial:

• Lower Value Rental Cars: If the rental car is worth much less than your personal vehicle, your personal auto insurance policy may provide insufficient coverage. In this case, using your credit card's rental car insurance can provide added protection.
• International Travel: Your personal auto insurance policy may not extend coverage to international rentals. In such cases, relying on your credit card's rental car insurance can be a wise decision.
• Business Travel: If you're renting a car for business purposes, your personal auto insurance policy typically won't cover it. Using your credit card's rental car insurance can fill this gap.
• Weak Personal Auto Insurance: If your personal auto insurance policy has high deductibles or limited protection, using your credit card's rental car coverage can provide additional peace of mind.
• Keeping Your Premium Low: If you want to avoid a potential increase in your personal auto insurance premium due to an at-fault accident, using your credit card's primary rental car coverage can help achieve that goal.

How to Use Your Credit Card's Rental Car Insurance

To ensure your rental car is covered by your credit card's insurance, follow these steps:

• Use the eligible credit card to pay for the entire rental cost, including any fees.
• Decline the rental car company's collision damage waiver (CDW) or loss damage waiver (LDW) coverage options.
• Ensure that the primary renter and any additional drivers are listed on the rental agreement.
• In the event of an accident, theft, or damage, contact your credit card's insurance provider and follow their claims process. Provide any required documentation, such as a copy of the accident report, rental agreement, repair estimate, photographs, and a police report, if available.

Final Thoughts

Travel medical and evacuation

The exact policies and requirements of each card's coverage differ, so it is important to read the guide to benefits before travelling. Typically, you must call the benefits administrator before requesting a medical evacuation. The benefits administrator will get a physician on the phone to determine whether and where you need to be evacuated. Usually, you are taken to the nearest location that can provide the medical care you need.

There are some limitations to medical evacuation coverage. For example, your insurance might limit:

• Who the benefit covers
• When coverage is available
• The dollar amount covered
• Time periods of travel allowed
• Coverage of pre-existing conditions
• Coverage of certain activities
• What services are offered

If you want a premium travel credit card that offers this coverage, you can expect to pay above-average annual fees to match the above-average benefits. Here are some examples of credit cards that offer medical evacuation coverage:

• Chase Sapphire Reserve
• The Platinum Card from American Express
• U.S. Bank Altitude Reserve Visa Infinite Card

Travel accident insurance

Who is Covered?

Usually, travel accident insurance applies to the cardholder and their family members.

Coverage Amount

The maximum benefit amount can vary widely depending on the type of injury and the specific credit card. For example, American Express's coverage maxes out at $250,000, while the Chase Sapphire Reserve® card may pay out up to $1,000,000.

Possible Exclusions

It's important to note that there may be exclusions to travel accident insurance. These can include loss resulting from emotional trauma, mental or physical illness, disease, pregnancy, childbirth, miscarriage, bodily malfunctions, self-inflicted injuries and more. Be sure to carefully review the terms and conditions of your credit card travel insurance to understand any possible exclusions.

Frequently asked questions