Does My Credit Card Provide Travel Insurance?

Doesn’t My Credit Card Provide Travel Insurance?

The short answer is yes, credit cards do provide travel insurance.  The long answer is quite a bit more complicated and deserves closer inspection.

Credit cards can provide travel insurance, but their coverage often won’t fit your particular needs.  A close look at the details of your credit card’s travel insurance will show that their coverage is often limited and full of restrictions and conditions.  Before relying on your credit card’s coverage, you’ll need to see if it meets your specific individual needs for the trip you are planning.

Before you even contemplate this decision, you need to know if you will even be purchasing the trip with the credit card in question.  Most credit card companies will require that you use their card in order to take advantage of the travel insurance that comes with it.  That means that if you want to purchase your trip with Card A that has a better interest rate, but use the better travel insurance from Card B, you might be out of luck.

Many credit card travel insurance plans will not cover trip cancellation insurance.  This introduces a serious risk to your trip, especially if the flights are particularly expensive.  Any kind of unexpected life altering event like a broken leg, loss of job, funeral or other incident that forces you to cancel your trip would result in you eating the costs of the trip with no refund.

The amounts covered by a credit card’s travel insurance can often be quite small or limited compared to your normal travel insurance provider’s plans.  Credit cards will often have an “emergency benefit” in place of your medical insurance.  However, these “emergency benefits” will usually leave you responsible for all of the expenses received from the hospital or doctor after your emergency, possibly leading to thousands of dollars of unexpected costs.

Many cards coverage will limit the length of stay depending on age.  If you’re a snowbird planning on flying down south to escape the Canadian winter, credit card travel insurance isn’t for you.  Or if you’re planning that once in a life time backpacking trip to Europe, you might want to explore other options for out of country travel insurance.

Eligibility criteria is often much stricter with credit card travel insurance coverage.  If you have specific medical conditions, coverage from credit cards might be a problem.  Age restrictions might exclude elderly travellers from getting the travel insurance they need.  Travel insurance from an insurance provider will allow you to pick the right plan for your travelling needs.

Many credit card companies may offer baggage insurance for lost or damaged luggage.  However, the maximum allowable reimbursement can be as low as $500.  At first glance, this may seem like a lot, but if you plan on bringing your high end digital camera, golf clubs, laptop, or any other expensive item with you on your trip, you will have a hard time replacing them with a low claim amount.  More personalized baggage insurance will make sure the items you bring are covered.

It’s true that credit cards can offer adequate travel insurance in very specific situations, but you need to make sure that you’re adequately covered for the unexpected.  Ensure that your trip is risk free with customized travel insurance plans suited to your unique travelling needs.