Does your credit card offer enough travel insurance?

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Is Dan Kriser overdoing it?

“I know that as long as you have a major credit card you don’t need to buy additional insurance when you rent a car,” says Kriser, an investment manager from Highland Park, Ill.. “But how about trip insurance when you travel?”

Elliott Advocacy is underwritten by Allianz Travel Insurance. The Allianz Travel Insurance company has built its reputation on partnering with agents all around the world to provide comprehensive travel insurance for their clients. Contact Allianz Travel Insurance for a comprehensive list of coverage.

Specifically, Kriser wants to know how his credit card — a United MileagePlus Visa Signature — stacks up to his Allianz Global Assistance plan.

“Am I buying essentially the same insurance twice?” he wonders.

Answer: they are not the same. And it’s an important exercise for the rest of us, who might be thinking of skipping a travel insurance policy for an upcoming trip. Read the fine print before you make any decision.

Credit card insurance may or may not work. I normally hear about it when it doesn’t, like Monique Tubb’s case. Her adult daughter was injured while vacationing in Colorado, so she canceled the rest of her trip and flew home immediately.

Tubb thought her UnitedPlus Explorer card’s insurance would help her, but it didn’t. Turns out the card only covered “prepaid” expenses.

Travel insiders like Ann Geraci know that you have to carefully review the credit card terms before your trip. Geraci, a travel agent from Northbrook, Ill., notes that her MasterCard covers trip interruption and cancellation due to medical reasons.

“But the hitch is that is MasterCard takes the claim, then must wait 12 months before refunding the amount,” she says.

Why so long? Because a ticket has value for 12 months from date of issue, even though the ticket amount is less than the $200 exchange fee in case you wanted to apply to another ticket.

“So, buy the additional insurance if you want, and wait just 30 to 60 days for the refund — or place the claim with your credit card and wait the 12 months for full refund.”

Who knew?

Kriser’s question doesn’t have a quick answer. If you take a look at the lengthy benefits guide and then compare it to a sample Allianz policy, you’ll see why.

The card insurance covers basics like car rentals, trip interruption and cancellation. The standard “named perils” travel insurance policy covers more events, including delays, emergency medical and dental costs, and change fees.

Even when the coverage looks the same, there are important differences.

Consider travel delays. The insurance delay policy kicks in if you’re delayed more for six or more consecutive hours for one of the following covered reasons:

✓ Strike or common carrier delay
✓ Your departure is delayed by a common carrier.
✓ Your departure is delayed by an unannounced strike.
✓ You are quarantined.
✓ Natural disaster or severe weather
✓ Severe weather delays your departing flight or causes road closures.
✓ Politics, violence or theft
✓ Your passports, money or other travel documents are lost or stolen.
✓ Your travel is delayed by a hijacking.
✓ Your travel is delayed by civil disorder or unrest.

Allianz covers prepaid expenses, as well as “reasonable” meals, accommodation and transportation expenses, up to $200 per day.

The card policy only covers equipment failure, inclement weather, labor strikes, and hijacking or skyjacking, but it only kicks in after 12 hours. It pays up to $500 for each purchased airline ticket. And, of course, you need to use that particular credit card to pay for your ticket.

So should you rely on your card’s insurance or not? Depends. I hear from a fair number of travelers who wish they had purchased a real policy through an insurance company. But I also hear from folks like Julie Fried, whose luggage was delayed on a recent flight from Baltimore to St. Lucia.

Her airline offered to cover some, but not all, of her expenses.

“We had had many expenses due to our circumstances and spent a few hundred over what the airline allotted,” she remembers. “Our credit card told us to submit the rest of our receipts and to write a letter explaining the situation. It covered the difference with no problem.”

Bottom line: Read your card coverage carefully when you make your travel plans. If you think you might need more protection, consider buying it.

7 thoughts on “Does your credit card offer enough travel insurance?

  1. I have numerous CHASE United cards which include trip insurance. In the past I have used these (especially my Presidential Plus and my Sapphire Preferred) and found the benefits company easy to work with and quick to pay out. However, a few years ago CHASE changed the company which provides the benefits. The new company seems to deny all first claims and requests additional info or receipts before they will pay. Often I have already submitted what they request and must call the benefits company to point this out to someone before the claim will be paid. If it is a small amount anyway, I wonder if some card holders might just not follow through and forget the whole thing. Is this what the benefits company is hoping? I am just stubborn enough to keep on it. Eventually I get my claim paid but it is very annoying that I have to keep after the company. CHASE should get a better benefits company!!

    1. They have a better benefits company, for them. Those benefits have cost and in this case it’s coming from Chase. More relaxed programs have higher costs and Chase isn’t a charity.

  2. CC insurance is essentially bare bones benefits that covers minimum amount for the basics, but it also doesn’t cost anything additional, it works whether you buy another policy or not. Insurance is just that insurance it covers certain events and you pay a premium for it. The more you have at stake and the greater your loss and higher the risk the more you want insurance.

  3. “I know that as long as you have a major credit card you don’t need to buy additional insurance when you rent a car,”

    Bold statement here that isn’t necessarily true.

    Look, I am a huge advocate on this site for using credit card trip insurance coverage. For a small annual fee for the card, you can get huge benefits in points and added protections. I am the fanboy Chris accuses me of. But I usually try to also caveat the big exceptions here. Many of the perks are not replacements – if it is a trip of a lifetime, get added protection! If you can’t afford the effort or wait time for a claim, get other insurance!

    You always have to read your policy and know what is covered. For instance, not all credit cards offer primary CDW — some are secondary to your personal policy. Others won’t cover SUV’s or cars over $50,000 MSRP. Knowing the exceptions can be crucial as policies are not written in your favor all of the time, and the burden is on you to do your research.

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