What kind of insurance does your credit card provide?
April 29, 2019. Although you may have chosen your credit card because of the rewards and sign-up bonuses, you may not think about what insurance comes with having one. There is no one card that has every possible type of insurance but there is a range of options that may come with your card and it is worth finding out what the perks are.
Common credit card coverage
Some common types of insurance that comes with credit cards are:
Cell phone replacement
If you pay your cellphone bill with your credit card, a new phone may be covered when your old one breaks.
What is covered:
o If your phone is stolen or damaged, you may be covered for up to $250
What is not covered:
o If your phone is lost it will not be covered
o Damage due to earthquakes, nuclear disasters and other circumstances listed in the fine print
Rental car collision coverage
Many people who rent cars pay about $30 a day for the rental company’s coverage instead of taking advantage of the insurance they already have on their credit card.
What is covered:
o Collision repair
What is not covered:
o Liability
o Loss-of-use fees (the per-day fee that the rental company may charge while the vehicle is being repaired)
Travel accident insurance
Travel accident insurance is similar to life insurance (but only lasts for the duration of your trip).
What is covered:
o Death or dismemberment caused by an accident on a plane, boat, or another official carrier is generally covered between $100,000 and $200,000.
What is not covered:
o Accidents that happen while you are travelling to or from work
o Medical emergencies other than death or dismemberment
Travel medical insurance
Travel medical insurance covers unexpected medical costs while travelling.
What is covered:
o Costs associated with medical emergencies or illness, such as hospital stays and prescriptions
What is not covered:
o Preexisting conditions
Trip cancellation and interruption insurance
If your trip is cancelled your credit card company may reimburse you for non-refundable expenses.
What is covered:
o Non-refundable flights if your trip is cancelled due to illness or an emergency
What is not covered:
o Cancellations due to pre-existing conditions
o Cancellations due to weather
o Claims related to travelling in war zones
Lost baggage
If your luggage goes missing, your credit card may cover its contents.
What is covered:
o Luggage that is stolen or lost by the carrier, personal effects, and documents such as passports are typically covered up to $3,000.
What is not covered:
o Certain items such as glasses, hearing aids, cameras, and sports equipment are often not covered (check the fine print on your policy).
o Luggage that is delayed but not permanently lost
Tips for getting the most out of your credit card’s insurance
Your card may come with some useful perks, but because they are meant to be supplemental insurance, you do need to consider what coverage you need and make sure you get it.
Find out what kind of coverage you have
Figure out exactly what kind of coverage you have through your credit card, including limits and exclusions, so there are no surprises when you need to use it.
Only buy the coverage you need
Figure what type of coverage you need and buy additional insurance to cover any gaps. For example, if your credit card provides you with travel accident insurance but not travel medical, make sure you purchase travel medical insurance for your next trip.
Keep receipts for big purchases
In order to make a lost baggage claim, you will need to have paper or electronic receipts, so keeping them is important especially for high-value items. Sometimes having an online account is enough to access your statements and receipts.
