Travel Insurance Vs. Credit Cards: How Trip Cover Compares

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  • Travel insurance and some credit cards can protect you from financial loss while traveling.
  • Travel insurance provides more comprehensive coverage that protects you on one or more trips.
  • Credit cards may cover flight cancellations, lost bags, and other events on trips booked with your card.

Anything can happen while traveling. Flight delay, baggage loss, or even unexpected injury or illness. When these things happen, the travel insurance or travel protections included with your premium credit card may be able to help, provide medical coverage, offset your financial losses, or even fully compensate you.

But do you need travel insurance and credit card travel protection? Here are details of both and tips for deciding which one is right for your trip.

Travel Insurance vs Credit Card Travel Protection: A Quick Glance

Many credit cards offer travel protections that can help you through some unexpected travel situations. But it’s not exactly the same as a separate travel insurance policy.

Here’s how the two differ on a high level:

  • Travel Insurance: Travel insurance is the coverage you buy either for one trip or for multiple trips in a year. It usually covers costs associated with flight cancellations, flight delays, medical emergencies and some other unforeseen events that may occur while travelling.
  • Credit Card Travel Protection: These benefits are included automatically with some consumer credit cards. They often provide coverage for delays, lost baggage, rental car collisions, and other events while travelling. Sometimes credit cards advertise this protection as a type of travel insurance, even though it’s not actually a separate insurance policy.

In general, specific travel insurance is more comprehensive than the protection offered by a credit card. However, it is useful to compare both options, especially if you are taking an expensive trip.

Says Carol Mueller, Vice President of Berkshire Hathaway Travel Protection. “Credit card protection may not include the full, combined, and comprehensive coverage that a travel insurance plan will provide.”

What is the travel insurance?

Travel insurance protects you from financial losses related to travel. Christina Tuna, Managing Director of the Americas and Global Marketing at world nomadsa company that provides travel and safety insurance services.

Travel insurance works like any other insurance policy. When a covered event occurs, such as your flight being canceled or you getting hurt while traveling, you can file a claim with your insurance company. If accepted, the company will reimburse you for costs up to your coverage limits.

“Most people have no idea that their health insurance doesn’t cover them abroad,” says Shane Mahoney, founder of the company. Logos TravelTravel advice. “So, a broken arm from slipping and falling or a heart attack can be financially devastating.”

There are travel insurance policies for one trip and Annual travel insurance plans, which covers all your travels within a 12-month period. According to Megan Walsh, product manager for insurance comparison site InsureMyTripSingle trip policies tend to cost 4% to 10% of the total prepaid, non-refundable flight costs. So, for a trip that costs you $10,000 to book, you’ll pay around $400 to $1,000 for insurance, depending on what coverages you want.

Aside from the additional cost that comes with travel insurance, the main difference between these policies and credit card protection is that the insurance policy will usually cover emergency medical expenses and the costs of evacuating the traveler to obtain necessary medical care.

“Some travel insurance policies also provide Pandemic Coverage endorsements, which provide coverage for customers who develop COVID-19 disease or a future pandemic, are individually required to self-quarantine, or are denied boarding due to suspected illness,” says Daniel Durazo, Director. External communication in Allianz PartnersTravel insurance company.

Separate travel insurance policies also tend to offer more robust cancellation coverage. In many cases, credit card protection limits reimbursement at just $10,000 for the trip, while travel insurance often goes as high as $100,000. Most credit cards will also cover only trips purchased with the card or its reward points.

Example of travel insurance

According to Tona, the medical protection that comes with travel insurance “covers accidental injury and illness — like tripping over a cobblestone street in Croatia or catching food poisoning in Thailand.”

If one of the above happens to you while traveling, you can file a claim with your insurance company – either by calling an agent, mailing or faxing a claim, or using the insurance company’s website or mobile app. You usually need to do this within 90 days of the event, although the sooner you apply, the better.

When making a claim, you also need to provide proof of your financial loss – a receipt from the medical clinic you used or a medical statement from a doctor. Once the claim is reviewed and approved, you will receive a compensation payment, usually via a check mailed to your home address.

What is Credit Card Travel Protection?

Many premium credit cards offer travel protection to cardholders, but the exact coverage depends on the credit card. Usually only flights booked with this card are eligible for coverage.

“Credit card travel insurance has a huge advantage for travelers: It’s usually free or included in the card’s annual fee,” Durazo says. “Credit card travel benefits can be useful for the little things, like travel delays or lost bags, but only travel insurance provides reliable protection in true emergencies, like expensive medical emergencies like hospital visits and evacuations.”

However, in some cases, a credit card may cover catastrophic accidents. Chase Sapphire, for example, offers $100,000 coverage for an accident that causes loss of life, speech, hearing, or use of the hand, among other life-altering injuries.

Additionally, credit card coverage limits tend to be much lower. The Sapphire Card offers up to $20,000 per trip in cancellation coverage, while Travel Guard’s Basic Travel Insurance plan offers five times more coverage.

Example of credit card travel protection

Your credit card’s travel protection can come in handy if the airline loses your luggage. In this scenario, you can file a claim with the carrier and then your credit card issuer. Once approved, they will compensate you for the total value of the lost items, minus any compensation you received from the carrier.

For these types of claims, you will usually need to provide your claim form along with the travel itinerary, proof of your claim with the carrier, copies of any associated receipts (for checked baggage charges, for example), and copies of receipts for any replacement items such as a new suitcase Or a wallet or anything else lost by the carrier.

bottom line

Travel insurance and credit card protection can both come in handy if your trip is canceled or you suffer another loss while traveling, but the right choice depends on your exact trip details and budget.

“Every trip is different, and every traveler has different needs and concerns,” Walsh says. “For a short trip to a family member’s home in the United States, travel insurance offered through a credit card may be sufficient. However, if you are traveling abroad or on a longer vacation and are concerned about unknown emergency medical expenses or losing money due to cancellation, you may You would like to consider a traditional travel insurance policy.”

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