Credit cards offer more than just a way to spend money and earn points. One major benefit of many cards is insurance on travel bookings and other purchases.
Don’t be surprised if you find insurance to be a very dry and dense topic – after all, the devil is in the details, and comparing different policies isn’t always that simple. This guide should help you understand the nature of what you’re covered for as a cardholder, and what to look for as you research your options.
You’ll notice a lot of non-committal, generalized language here. Each policy is a bit different, and it’s always essential to read the fine print of your particular coverage.
Credit Card Insurance Overview
Why Do Credit Cards Offer Travel Insurance?
You’ll notice that many cards’ insurance policies place an emphasis on travel. That’s because premium credit cards tend to target travellers, and travel insurance is a valuable perk to help justify high annual fees.
Travel has so many moving parts: ticketing, transportation, baggage, accommodation, unique civil conditions, not to mention things that can happen at home like accidents or medical emergencies. It’s no surprise that things can and often do go awry, and it’s good to be insured for peace of mind so you can relax and enjoy your trip.
Now, travel insurance isn’t something that most people have or need on a day-to-day basis.
You don’t use a travel insurance policy except for when you’re actually travelling, so it’s easy to overlook. You need it just often enough that it’s worth finding the right policy, but not often enough that it’s on the forefront of your mind.
And without the coverage built in as a credit card perk, you’d have to buy a policy each time you take a trip (or an annual policy if you’re a frequent traveller).
Don’t expect to find home, automobile, or life insurance on credit cards. You’re on your own for those. If you have a home, car, or (uhhh) life, you do need these to be protected daily. You wouldn’t want those types of coverage to be tied to a credit card account, which is temporary in the grand scheme of things.
How to Use Credit Card Insurance
It’s good to designate a long-term keeper card for any bookings or purchases for which you’re counting on the insurance policy. Your coverage will lapse when you cancel the credit card or if your account is no longer in good standing.
Many policies specify…
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