Is Credit Card Travel Insurance Right for You?

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KEY POINTS

• Top travel credit cards offer competitive travel benefits

• Credit card benefits lack the ability to customize your travel insurance

• You may need to consider a specialty plan or coverage for your unique needs like adventure travel, extreme sports, cancel for any reason, pre-existing conditions

We all enjoy daydreaming about and booking vacations. They can bring family and friends together and forge memories that last a lifetime.

Unfortunately, not all vacations go as planned. From unexpected natural disasters to sudden health emergencies, your dream escape can quickly turn into a stress-filled ordeal.

Enter credit card insurance – your saving grace.

If your entire trip is charged to your credit card, you may have financial security and coverage for vital medical care. Your credit card could be your ticket to peace of mind.

Do all credit cards offer travel insurance?

Not every credit card offers travel insurance.

Different tiers or types of credit cards offer varying degrees of travel insurance coverage based on their annual fees and perks.

Premium travel credit cards often provide extensive coverage, such as trip cancellation/interruption insurance, baggage delay protection, and rental car insurance, which may not be available or may have limited coverage on entry-level credit cards.

These additional benefits cater to frequent travelers and enhance the overall value of premium credit cards for those who prioritize comprehensive protection during their journeys.

What does credit card travel insurance cover?

We present the following hypothetical comparison of credit card travel insurance benefits provided by a leading credit card provider.

Benefit	Credit Card Coverage
	Luxury Card	Mid-Tier	No Fee
Cost
Annual Fee	$800	$250	$0
Non-Medical
Trip Cancellation	$2,500 / insured	$1,500 / insured	-
	Max. $5,000	Max. $3,000	-
Trip Interruption	$2,500 / insured	$1,500 / insured	-
	Max. $6,000	Max. $6,000	-
Flight Delay	$1,000	$500	$500
Baggage – Delay	$1,000	$500	$500
Baggage – Lost / Stolen	$1,000	$500	$500
Hotel Burglary	$1,000	$500	$500
Rental Car Collision	$85,000	$85,000	$85,000
Medical
Emergency Medical	$5,000,000	$5,000,000	$5,000,000
Travel Accident – Common Carrier	$500,000	$500,000	$250,000

We only included travel specific insurance coverages. Therefore, we excluded credit card benefits including, but not limited to airport lounge access, elite / loyalty status in select hotel or car rental rewards programs, point accelerators, Nexus rebates, waived foreign exchange fees, purchase security, extended warranties, and mobile device coverage.

How do credit card travel benefits compare to standalone travel insurance policies?

Overall, premium travel credit cards can provide comprehensive insurance coverage.

Let’s take a deeper dive.

Trip Cancellation

A standalone travel insurance policy will often outperform a credit card offering with coverage equal to 100% of the trip cost with some maximums exceeding $100,000.

Trip Interruption

A standalone travel insurance policy will often outperform a credit card offering with coverage equal to 100-175% of the trip cost with some maximums exceeding $100,000.

Flight & Baggage Delays

A standalone travel insurance policy will often outperform a credit card offering with coverage often exceeding $2,000 for each type of delay.

Emergency Medical

The credit card benefits above are very competitive with the travel insurance industry. A $5,000,000 limit exceeds most standalone policies. However, as noted below, standalone travel insurance medical only policies may exceed $5,000,000.

Travel Accident

Like Emergency Medical above, credit card benefits can be very competitive. However, standalone travel insurance medical only policies may have limits exceeding those of credit cards.

What coverages are credit cards missing?

Typically, you can only secure the following coverages with a standalone travel insurance policy.

Pre-Existing Medical Condition Waiver

Some insurers offer this coverage if you have a pre-existing medical condition. It provides coverage under clearly defined circumstances. Typically, this coverage must be purchased within a pre-defined time from when you purchased your trip.

Cancel for Any Reason

This is highly sought after coverage. It allows you to cancel your trip for any reason (always read the fine print). The reimbursement range is typically 60-75% of the trip cost.

Interruption for Any Reason

Some travel insurance policies will offer this as an optional upgrade, and it provides enhanced interruption coverage.

Sports and Equipment Rentals

You may be able to obtain coverage for lost, damaged, or delayed equipment.

Pandemic Coverage

We have seen an increase in the number of policies with specific coverage related to pandemic related events, since the onset of COVID-19.

Customizable Coverage

Regrettably, credit card benefits often provide limited, if any, opportunities to tailor coverage to your unique needs. In contrast, the travel insurance industry offers the following customization options that are typically not available with a credit card program:

Age

Your credit card may have fixed age limits attached to its travel benefits.

Fortunately, the travel insurance industry is very competitive, and this has resulted in a wide array of policies available for all age groups.

Tiered Comprehensive Plans

It is common to have a choice between 3 different policy tiers with varying coverages. You can pick the degree of coverage that best suits your needs.

Optional Upgrades

These allow you a high degree of flexibility. These upgrades may include a pre-existing conditions waiver, cancel for any reason, interruption for any reason, increased emergency medical limits, adventure and extreme sports, and more.

Medical Only Plans

Your trip may have limited financial exposure to non-refundable trip costs. However, your risk of unexpected medical expenses can be substantial. In extreme cases, uninsured medical expenses can lead to prolonged litigation and personal bankruptcy.

Adventure & Extreme Sports Plans

Many activities are excluded from travel insurance policies. You may be surprised to learn that your bucket list parasailing adventure is typically not covered. Similarly, a group trek on a relatively easy to traverse glacier may become excluded from your policy as soon as they put an ice axe in your hand.

Thankfully, the travel insurance industry has specialty policies designed for these types of adventures, activities, and sports.

Group Travel

You may be able to save time and money by booking your group travel insurance needs with an insurance provider that specializes in this type of travel.

Other

Various other policy options are accessible, ranging from those specifically designed for cruises, flights, and vacation rentals, among others.

Tips for choosing travel insurance

It is important for you to take your time and make an informed decision regarding your travel insurance needs. We recommend following:

Assess Your Travel Habits

Evaluate your habits including your travel frequency, destinations, and preferences.

Understand Existing Coverage

Examine the insurance provided by your credit card, employer-sponsored group benefits plan, and government-sponsored health insurance.

Frequently, standard medical coverage may not offer international protection beyond your home country's borders.

Be sure to understand all limitations (age and financial) and exclusions. Highlight any gaps and move to the next step.

Compare Standalone Policies

You have a lot of choice when it comes to travel insurance. We are confident you will be able to find a policy that fits your needs and your wallet.

Consider Special Circumstances

Do you have a pre-existing condition?

Are you participating in anything resembling adventure travel or extreme sports?

Is your destination remote?

Is your destination prone to natural disasters?

Is your destination politically stable?

Are you travelling as a group?

Thankfully, there are options designed specially for each of these situations and many more.

FINAL THOUGHTS

As you navigate the world of travel insurance, may your adventures be safeguarded and worry-free. Choose wisely, considering your unique needs and circumstances.

Here's to smooth journeys and safe travels ahead!

Teaming up with 12 top-tier travel insurance providers, we offer a comprehensive evaluation of their product offerings, featuring detailed insights, pros and cons, policy tables, and exclusion lists. Feel free to explore these reviews as a valuable resource in your due diligence journey.