Travel Insurance vs. Credit Card Insurance

Wanderlust is in the air. Travelers all over the world are checking their calendars for the best times to take the trips they’ve been dreaming up during COVID lock-downs. If you’re one of these travelers, you might be feeling a mix of excitement and uncertainty as you look up flights, check out hotels and keep informed about the COVID situation in your destination country.

One way to relieve some of this anxiety is by purchasing travel insurance. As countries reopen to tourists, more than half of all travelers are expected to buy travel insurance. Trip and travel coverage is quickly becoming a travel essential. And now, some credit card companies are offering their own trip protections to customers. So how do you know which is better, travel insurance or credit card travel insurance?  

Trip cancellation 

While some premium credit cards do offer some measure of trip cancellation protections, credit card trip protections generally won’t cover you financially if you have to cancel your trip plans unless it’s for a reason out of your control like a natural disaster. Post-pandemic travel will likely be complicated and unpredictable.

Luckily, one of the main benefits of travel insurance is that you have the option of adding a Cancel for Any Reason (CFAR) benefit. This benefit allows you to be reimbursed for prepaid trip expenses should you need to cancel your trip for, literally, any reason. You’re credit card can’t do that.

Non-medical evacuation

A lot of credit card trip protections offer coverage for medical emergency evacuations. But if you need to be evacuated for any non-medical reason, such as political unrest or natural disasters, your credit card might not be enough. If there’s a possibility that you might face any of these situations, purchasing comprehensive medical insurance can give you peace of mind. While not all plans will cover non-medical evacuation, some will. Discover more about the different types of evacuations. 

COVID-19 coverage

Credit card travel insurance may cover events related to COVID, like mandatory quarantine or trip cancellations caused by a sudden surge in cases, but they typically don’t cover medical care for a newly afflicted traveler. On the other hand, buying travel insurance that covers COVID-19 like any new illness, will save you a lot of stress and money if you contract COVID-19 while traveling and need medical care.   

International travel

Credit cards won’t always cover medical expenses and if they do, it may be a limited portion of your cost and you would need to get reimbursed later. With travel insurance, you’ll have more options to protect your finances and your health. Also, travel insurance is more convenient. Instead of waiting to be reimbursed after the fact, travel insurance can cover a number of fees upfront.

All you have to do is provide your policy information to the provider. If it’s a covered benefit, you’re only responsible for the deductible. This process is especially useful for international travel where there may be a language barrier preventing you from fully understanding the fees.  

Adventure sports

The world promises so many amazing adventures: You can go snorkeling in the Great Barrier Reef, scuba diving in Costa Rica or snowboarding in Denver. But adventure sports come with a higher risk of injury. This means your credit card trip protections may not be enough coverage. Travel insurance can protect you from high medical expenses and ensure you get the care necessary.    

When deciding between credit card insurance and travel insurance, consider your specific travel needs. Factors like your health, age, ability, where you’re traveling, what activities you’ll be doing, and trip duration play a big part. In general, though, while your credit card may offer some level of trip protections like trip delays, loss baggage, travel accident coverage and certain trip cancellations, comprehensive travel insurance offers a much broader range of protections like Cancel For Any Reason insurance (CFAR), travel medical, and injuries related to certain adventure sports.

In other words, travel insurance protects both the trip and the traveler.