1. It provides no medical coverage throughout your trip Most credit card companies only provide AD&D coverage, which stands for Accidental Death & Dismemberment. For coverage, you need to be involved in a common carrier accident like an airplane crash. The insurance company pays out a percentage of the total coverage based on what loss was suffered. For example: death or loss of both legs pays 100%, but loss of sight in one eye or loss of fingers only pays 50%. Companies such as Nationalcity.com , AmericanExpress , and Capital One offer travel insurance such as this.However, if you buy from a company that specializes in travel insurance , you are provided with medical coverage for accidents or illness throughout your trip. If you get sick after eating at a restaurant, you can go to the hospital. If you slip and fall, you can be treated for your injuries. The idea is to provide medical coverage like you have at home, not just common carrier accident insurance.2. You have no coverage for canceled tripsOne of the most popular reasons for travelers to purchase trip insurance is to have coverage for canceled trips. A last minute illness, death in the family, or even home fire can cause long-anticipated and well-planned vacations to be canceled.If you purchase travel insurance from an independent company, you are covered for trip cancellation. Companies such as Travel Guard , CSA Travel Protection , and Access America offer plans with trip cancellation coverage.Some companies, such as TravelSafe and M.H.Ross, even offer “cancel for any reason” coverage, which lets you change your mind at the last minute and receive partial reimbursement.

3. The coverage amounts are very limited

Let’s assume all you want is AD&D coverage for common carrier accidents and you decide to use the insurance that comes with your credit card, you might be surprised at the coverage amounts. They often provide lower amounts of coverage, and do not provide the traveler with any options to increase the coverage.

When buying from a travel insurance company, you are provided with coverage levels of up to $1,000,000, and many plans even allow variable levels of coverage.

4. Your lost, stolen, or damaged baggage is not covered

Most credit card insurance does not provide coverage for lost, stolen, or damaged baggage and travel documents. This is another popular reason for travelers to buy trip insurance, and if you count on credit card travel insurance you will be disappointed. Some companies do offer limited baggage coverage, but many do not.

Baggage coverage is a standard part of all travel insurance package plans. It covers you for lost, stolen, or damaged bags, and even reimburses you for clothes purchased if your bags are delayed. Coverage generally varies from $500-$2500.

5. Credit card travel insurance provides no coverage for trip interruption

If you do suffer an accident or illness while vacationing, and you need to return home, you will lose the remainder of you trip costs. If you get hurt on your first day in the Bahamas, the rest of the week is a total loss.

Travel insurance plans from travel insurance companies provide coverage for interrupted trips due to accidents or illnesses.

6. Free credit card trip insurance does not provide medical evacuation coverage

One of the scariest parts of travel accidents is the expenses related to medical evacuation. If you need to be transported to a hospital, or back home after treatment, medical evacuation can easily cost over $100,000. This is paid out-of-pocket unless you have the right insurance coverage. Credit card travel insurance does not cover medical evacuation.

Package plan trip insurance purchased from a travel insurance company provides evacuation expense coverage from between $100,000 and up to $2,000,000. Don’t get stuck (literally) in a foreign country because there is no way to get home.