Today’s credit cards often come with many benefits, like signing bonuses or cashback programs. Travel-related credit cards may also feature travel insurance benefits as part of their incentives. But what kind of coverage can credit cards provide for your next vacation? Is it enough?
We will break down the basics of travel insurance benefits with most credit cards. Discover what’s included and what might be missing in your credit card’s travel insurance policy.
Know your options when it comes to purchasing a supplementary travel insurance policy. Decide what is the best decision for you and your travel plans.
Breaking Down Credit Card Travel Insurance
Credit cards that feature travel insurance benefits may be an option for protecting your travel investments. However, benefits tend to be limited.
First, let’s explore what credit card travel insurance is and what benefits are commonly included.
Does Every Credit Card Provide Travel Insurance?
No! Credit cards with travel insurance benefits often come from two different sources: a bank or a travel-related business (i.e. hotel, airline).
Most major banks provide at least one credit card that features travel insurance benefits as well as cashback programs.
Travel-related businesses such as hotels and airlines may promote their own credit card with travel insurance benefits and other incentives to encourage travelers to use their services the next time they travel.
Here’s an overview of some of the best credit cards that include travel insurance, according to ThePointsGuy.com.
3 Things to Remember When Applying for a Travel Credit Card
1. Credit Score – Credit cards that feature travel insurance benefits often require a higher credit score for approval. Many require a minimum credit score of Good (690-719) or Excellent (720-850). For example, The World of Hyatt credit card recommends a minimum credit score of at least 690, while Chase Sapphire Rewards recommends a minimum credit score of at least 720.
Check your card’s policy before applying to avoid a denied application. U.S. citizens can visit AnnualCreditReport.com for a free credit report from each of the three credit reporting agencies (Equifax, Experian, and Trans Union).
2. Annual Fees – Take note of annual fees before applying for a travel credit card. Annual fees can range anywhere from $0 to $550.
3. APR – Keep in mind the APR (annual percentage rate), or interest rate, for any travel credit card you might apply for. Credit cards tend to a have a high APR, typically ranging from 15.6% to 22.75%, for those who are unable to pay their balance in full on each month’s due date.
What Kind of Coverage Should I Expect from Credit Cards?
Credit cards with travel insurance vary. Be sure to check your card’s specific benefits to know what you would be covered for on a trip.
There are a few benefits that credit cards with travel insurance sometimes include:
- Trip Cancellation – Coverage for nonrefundable trip expenses in the event you cancel your trip for a covered reason. Only 20% of credit cards offer trip cancellation coverage, according to WalletHub.com.
- Trip Interruption – Coverage for nonrefundable trip expenses in the event your trip is interrupted due to a covered reason.
- Lost or Delayed Baggage – Coverage for luggage that is lost or delayed while in transit. WalletHub.com shares that 23% of credit cards offer coverage for lost luggage, while only 19% offer coverage for delayed luggage.
What Is My Credit Card’s Travel Insurance Missing?
Your credit card may not feature all the benefits you are looking for in a travel insurance policy. A comprehensive travel insurance plan will likely provide additional coverage for unexpected medical expenses and lost luggage in addition to trip cancellation and trip interruption benefits.
Consider the benefits you may be missing out on when relying on your credit card’s travel insurance benefits and decide what kind of coverage you need for your trip.
Know whether your credit card provides both international and domestic coverage or just domestic coverage. You may consider a supplementary travel insurance plan in the event you travel out of the country.
Are you planning on traveling to the Schengen Area? Don’t forget to purchase a travel insurance policy that meets the requirements for your Schengen visa.
Coverage for Expenses Paid without Your Credit Card
Usually, credit cards with travel insurance will only cover travel expenses that were purchased using the credit card. If you happen to book accommodations with a different payment method, you most likely won’t be covered for those expenses if your trip is interrupted or cancelled.
Coverage for Medical Expenses
Coverage for unexpected medical expenses is also not a common feature for credit card travel insurance. Additionally, many primary medical insurance policies provide only limited coverage once you cross the border to another country.
In the event you are injured or become ill unexpectedly, your credit card’s travel insurance may not cover the expenses you incur. Seek out a comprehensive travel insurance plan to provide coverage for both trip cancellation expenses and unforeseen medical emergencies.
Do you know what an Emergency Medical Evacuation benefit is? Learn more about what it covers and why you might need it for your trip.
Cancel for Any Reason (CFAR) Benefit
The option to cancel your trip for any reason is often not an included benefit of credit card travel insurance. Even if your credit card travel insurance includes a Trip Cancellation benefit, it will most likely only reimburse you if you cancel your trip due to a covered reason.
Those who want the reassurance of cancelling for any reason can purchase a supplementary policy with the option to add a Cancel for Any Reason (CFAR) upgrade. A CFAR benefit can provide reimbursement for your trip expenses—often 50%-75%. Keep in mind that you typically have to purchase your travel insurance plan within a certain number of days of your initial trip payment date to be eligible for a CFAR benefit upgrade.
The Atlas Enterprise trip cancellation plan from Nationwide and WorldTrips is one plan that offers an optional CFAR upgrade. It covers you for up to 75% of your nonrefundable trip costs if you cancel your trip for any reason, as long as you purchase the plan within 21 days of your initial trip payment date and elect the optional CFAR coverage.
PRO TIP! Did you know some countries require visitors to have travel insurance? See if your country requires travel insurance before your international vacation.
What is Comprehensive Travel Insurance?
Comprehensive travel insurance can provide many important benefits you may be looking for in your travel insurance policy, including trip cancellation reimbursement and emergency medical expense coverage.
An Atlas Trip Cancellation plan can provide coverage beyond that of typical credit card travel insurance. There are three plans available—Atlas Excursion, Atlas Expedition, and Atlas Enterprise—so you can find the coverage you’re seeking for your trip.
Key benefits of these policies include:
- Trip Cancellation
- Trip Interruption
- Pre-Existing Condition Waiver (with Atlas Enterprise – see the full policy documents for details)
- Cancel for Any Reason (optional upgrade with Atlas Enterprise)
- Emergency Medical Expense
- Emergency Medical Evacuation & Repatriation of Remains
Price your plan to learn more about Atlas Trip Cancellation insurance or get covered today.