How does credit card coverage stack up to travel insurance?
Credit card-provided travel insurance may not be comprehensive enough to fully protect your trip.
Many folks book their vacations with credit cards in order to accumulate rewards and reap any benefits offered by the company, which sometimes includes travel insurance. While this coverage is certainly better than going without protection, it’s imperative to delve into exactly what is included in that coverage before deciding whether to also purchase third-party travel insurance.
Complementary travel coverage will vary card-to-card, but some of the most common perks include:
- Coverage if a trip is interrupted because of a covered reason, like severe weather or an illness.
- Protection for flight delays that cause you to pay for lodging or extra meals.
- Reimbursement for essential items if your luggage is delayed.
- Coverage for damaged or lost luggage.
- Reimbursement for healthcare if you are sick or injured on your trip.
- Coverage in the event your rental car is stolen, or you are in an accident and another driver is responsible.
These coverages may not be comprehensive enough to fully cover your trip, though. Squaremouth, a travel insurance comparison site, explains that there are three main areas where credit card-provided travel insurance may be lacking.
The first of these is in the case you experience a medical emergency. Some cards offer no medical emergency coverage at all, and those that do may have limits capped at $5,000 or less. Third-party travel coverage can offer travelers much higher medical benefit limits, as well as coverage for medical evacuation. Third-party coverage can also provide protection for those with pre-existing and chronic conditions or injuries.
For those taking more luxurious or higher-cost trips, the trip cancellation coverage provided by their credit card company may fall short of how much money they would lose if their trip were to be canceled. Third-party coverage offers more options for these travelers, with some policies able to reimburse up to 100% of travel expenses, like airfare, hotels and tours.
The third instance where credit card travel coverage may fall short is with cancellation flexibility. As Squaremouth explains, there are usually only a few reasons, such as illness, death or severe weather, that will allow a trip cancellation to be covered under many policies. Many third-party insurers, however, offer travelers the chance to purchase a ‘cancel for any reason’ benefit that allows them more flexibility in their plans.