As you gear up for your next adventure, one crucial consideration that is often overlooked is travel insurance. Among the options available, credit card travel protection can be a convenient choice for many travelers if they already have a credit card that offers travel insurance benefits.
While many credit cards provide some form of travel insurance, it is important to understand whether or not credit card travel insurance provides sufficient protection, and the possible limitations and exclusions of credit cards with travel insurance.
What Is Credit Card Travel Insurance & What Does It Cover?
Many credit cards come equipped with some form of travel insurance, ranging from trip and flight coverage to car rental insurance. However, it's important to recognize that the coverage offered by credit cards tends to be basic and often limited.
While premium credit cards may extend coverage to include aspects such as lost or damaged luggage and financial protections against COVID-19-related medical care, they often fall short in comparison to the comprehensive coverage provided by traditional travel medical insurance and trip insurance policies.
If you are looking for a plan that offers sufficient travel coverage, the smartest move will be to opt for a comprehensive travel insurance plan separate from the basic plans included with certain credit cards.
Why Credit Card Travel Insurance May Fall Short
Despite its convenience, a credit card with travel benefits comes with some key limitations.
Health Coverage Gap
Credit card travel insurance typically excludes health coverage, including emergency medical evacuation and hospitalization expenses. In destinations with high healthcare costs, relying solely on credit card benefits could leave you financially vulnerable.
Limited Reimbursement
Even though credit card insurance might sound tempting because of the certain protections they say will be covered, credit cards with travel insurance often have low claim limits and stricter exclusions, potentially leaving travelers underinsured in critical situations.
Exclusionary Policies
Certain activities or destinations may not be covered under credit card insurance plans, such as participating in adventurous activities or traveling to high-risk areas.
Cancellation Flexibility
Unlike private trip insurance, credit card coverage lacks the optional Cancel For Any Reason (CFAR) insurance add-on benefit, which offers valuable flexibility in canceling trips for otherwise non-covered reasons with the ability to reimburse a portion of your prepaid nonrefundable expenses.
Why You Should Consider Traditional Travel Insurance
While credit card travel insurance does offer certain travel benefits, it may not be sufficient for certain circumstances. Even though credit cards with travel insurance may appear as “free” with certain cards, adding an even stronger travel insurance protection is just about 4-10% of your total trip cost. If you had a vacation with a total cost of $2,000, that’s only about $80-$200 depending on your age and other travel specifics. The small expense can be a lifesaver, especially for international travel.
Trip insurance offers strong coverage for travel-related expenses and accident and sickness on your trip, and can also provide you with extensive coverage during your journey. Sometimes, it can even include rental car coverage as an additional benefit option. If you ever need to cancel, delay, or interrupt your trip for a covered reason, you can recoup up to 100% of your trip’s prepaid, nonrefundable expenses.
For such a modest investment, you can get strong coverage benefits for your trip, something that credit cards with travel insurance often lack:
- Trip cancellation coverage for a much wider range of scenarios beyond the standard reasons (including documented traffic accidents, strikes, pregnancy complications, or even divorce)
- Higher medical coverage limits (up to $500,000 or more) for international emergencies
- Coverage for adventure activities and sports equipment
- Cancel For Any Reason (CFAR) insurance, allowing you to cancel for quite literally any reason (must be purchased within 14-21 days of your initial trip deposit)
- Rental car protection that would cost more if purchased directly
- 24/7 travel assistance services for emergencies, translations, lost luggage help, and medical referrals
- And more. . .
For travelers who want to prioritize medical coverage, travel medical insurance may be the best option. Investing in travel medical insurance upfront could potentially protect you from exorbitant medical bills in the event of an unexpected injury or if you need to be medically evacuated, which could otherwise amount to tens of thousands of dollars.
Navigating Credit Card Travel Insurance
When relying on credit card travel insurance, it’s important to understand your coverage and keep in mind the following:
- Exclusions and Fine Print: Carefully review the terms and conditions of your credit card travel insurance policy to avoid surprises or denied claims.
- Claim Limits: Be aware of any claim limits imposed by your credit card insurance policy, ensuring they align with your travel needs and potential expenses.
- Destination and Activity Restrictions: Confirm that your chosen activities and destinations are covered by your policy to avoid gaps in coverage during your travels.
- Protection Against High-Cost Healthcare: If traveling to countries with high medical costs, verify that your insurance provides adequate coverage for emergency medical care to mitigate financial risks.
Maximize Your Travel Protection With Comprehensive Coverage
While credit cards with travel insurance can offer valuable benefits, it won’t encompass everything. Having comprehensive coverage is essential to mitigate risks and unforeseen expenses during your travels.
Considering additional travel insurance through reputable providers like VisitorsCoverage can greatly exceed the protection provided by credit card travel insurance. Comprehensive travel insurance policies can offer:
- Medical Coverage: Comprehensive health insurance, including emergency medical evacuation and repatriation.
- Cancellation Flexibility: Optional CFAR insurance, as an add-on to trip insurance, allowing you to cancel trips for any reason and recoup a portion of prepaid expenses.
- Activity Coverage: Optional protection for adventurous activities (as an add-on to trip insurance).
- Peace of Mind: Assurance that you're adequately protected against unforeseen emergencies, ensuring worry-free travel experiences.
Stay Protected During Your Trip With Travel Insurance
While travel insurance may seem like an unnecessary expense, especially when coupled with the costs of international travel, it can prove to be a valuable investment in the long run. In the event of emergencies or unforeseen circumstances, comprehensive coverage can alleviate stress and financial burdens.
Ready to compare your options? View our travel medical insurance and trip insurance plans. Not sure which policy is right for you? Learn more about the difference between travel medical insurance and trip insurance.
Have questions specific to your travel plans? Reach out to our Customer Success Team for help.
Are pre-existing conditions ever covered under credit cards with travel insurance?
Credit cards with travel insurance often do not cover pre-existing conditions. Instead, trip insurance can help provide coverage with a pre-existing medical condition waiver. Typically, you are eligible for the waiver if you purchase the policy soon after your first trip payment (14-21 days), insure the full cost of your trip, and are medically stable at the time of purchase. With the waiver, the policy may cover trip cancellations, interruptions, or delays related to your pre-existing condition.
Do standalone travel policies offer higher coverage limits for baggage loss than credit cards?
Trip insurance typically has more coverage if your baggage goes missing compared to credit card travel insurance. Credit cards cap baggage coverage at around $500-$3,000 per person, while standalone trip insurance typically offers $1,000-$5,000, with premium policies reaching up to $10,000. Additionally, trip insurance has higher per-item limits than credit cards, and offers more flexibility for electronics, jewelry, and specialty items.
How does Medicare coverage work overseas, and how does travel insurance help me?
Medicare generally does not cover healthcare costs outside the United States. However, travel insurance offers very high coverage abroad, and has specialized medical evacuation coverage that credit card travel insurance often lacks.
Which is more likely to cover you if you need to come home early from your trip: trip insurance or credit card travel insurance?
Trip insurance offers more significant coverage for covered trip interruptions. Most trip insurance policies cover up to 100-175% of your insured trip cost if you need to return home early for covered reasons such as a sudden illness or if there is a natural disaster at your destination deemed to be unsafe. Meanwhile, credit card travel insurance is more limited with the reasons, and typically has limits to how much it covers.
Can I get Cancel For Any Reason (CFAR) coverage through any credit card, or is this only available through standalone trip insurance policies?
Generally, credit cards with travel benefits do not have CFAR coverage, making it harder to recoup a portion of your costs and cancel your trip if you have an uncovered reason. Cancel For Any Reason coverage is mostly provided as an optional add-on to trip insurance plans, and it must be purchased within 14-21 days after your initial trip deposit. CFAR allows you to cancel for any reason, and can recoup up to 50-75% of your trip costs.
What are other factors that play into the price of trip insurance?
The price of trip insurance can vary based on factors like your trip cost, length, age, destination, and any optional add-ons. While it adds a small amount to your travel budget (4-10%), trip insurance can help protect you from major losses if your plans change unexpectedly.
Will standalone travel insurance cover me if I pay for my trip with points and miles?
Reward points or frequent flier miles tend to have policies from the airline that consider them to be refundable, and should not be included in your trip costs. If there are any rebooking fees or taxes related to your flight, it could be added into your trip cost for a potential reimbursement from your trip insurance plan. However, most airlines can reimburse your points or miles back in credit, but typically do not provide cash reimbursement. It is recommended to quickly verify whether bookings made through rewards points will be refunded in the face of a cancellation before deciding whether or not to include it in your trip costs.
If I am older than 65, do credit cards have age limits for travel coverage?
Many credit cards with travel insurance may often cap their age limit for seniors, typically providing some coverage for seniors under 75. However, the coverage for seniors with credit cards can be limited, especially if you have a pre-existing medical condition. If you are a senior over 65, you should look into standalone trip insurance plans that are more specialized for your needs and to purchase trip insurance as soon as possible to complete the pre-existing medical condition waiver.
