One of the messages we hear a lot from travelers and even travel experts is that you can get the same level of travel insurance protections with your credit card. We even see money experts reminding credit card holders not to waste their travel insurance benefits.
So, we decided to do the research and really understand what credit cards provide in the way of travel insurance protection and how those protections stack up against travel insurance.
Trip cancellation with your credit card
We recently had a complaint that civil unrest wasn’t covered by their travel insurance plan and the customer noted they would simply rely on their credit card travel insurance in the future instead.
Be careful! No credit card will cover cancellation for civil unrest (and some travel insurance plans do – you just have to read the plan details).
The only events that qualify for trip cancellation with your credit card are sickness or death of you, a traveling companion or family member, so the person posting a complaint would not have had the protection they thought they had. Plus the credit card companies are very particular about who qualifies as an immediate family member. Hint: in-laws, grandparents, step kids, aunts, uncles, and others do not usually qualify.
Maximum trip cost limits with your credit card
Some trip cancellation coverage may be included with your credit card travel protections, but there are limits on the maximum trip costs. For example, the SapphireSM card from Chase limits benefits to $1,500 for any 12-month period. That’s not gonna work if you have a family of four and you have to cancel a 4-person cruise in the Bahamas to care for an ailing parent.
Compare those maximum trip cost limits with the much higher limits provided by travel insurance and you can see that this is where travel insurance is definitely the better bet, provided you understand and adhere to the covered reasons for trip cancellations with your chosen plan.
Let’s compare travel insurance plans with your credit card
Let’s say there are two travelers headed to New Orleans in October (that’s hurricane season) for a 5-night vacation. They are U.S. citizens, 45 and 47 years old with health insurance back home. Their non refundable trip costs amount to $2,800.
When we plug these trip details into our travel insurance comparison tool, we found several plans:
Vacation Basic from TravelSafe for $110 with:
- 100% Trip cancellation and interruption up to $10,000
- Medical evacuation up to $100,000
- Secondary medical up to $35,000
- $100 per day (up to $500) for travel delays
- $100 for baggage delay (per person)
- $500 for lost baggage
Trip Protector Lite from Travel Insured for $114 with:
- 100% trip cancellation up to $50,000
- 150% trip interruption
- Medical evacuation up to $100,000
- Secondary medical up to $10,000
- $100 per day (up to $500) for travel delays
- $200 for baggage delay (per person)
- $750 for lost baggage
RoundTrip from Seven Corners for $115.00 with:
- 100% trip cancellation up to $20,000
- 150% trip interruption
- Medical evacuation up to $350,000
- Secondary medical up to $75,000
- $150 per day (up to $500) for travel delays
- $200 for baggage delay (per person)
- $1,000 for lost baggage
- Medical – If one of these travelers contracts a bad case of food poisoning and has to visit a New Orleans’ hospital, the medical charges could run into the thousands because they are outside their home insurance network. If that happens, travel insurance would pick up the rest up to the coverage limit. You can’t get that level of coverage with your average credit card.
- Trip interruption – Let’s say a hurricane does turn and heads toward New Orleans while they are on their trip. If these travelers want to go home, their trip interruption coverage will not only help them return home, it will also refund their unused vacation dollars as well. You can’t get that level of coverage with your credit card.
- Trip cancellation – If one of these travelers breaks their neck, loses their job, has their leave revoked, or gets in a car accident, they can cancel their trip and recover all their non refundable trip costs. You can’t get that level of coverage with your average credit card.
Of course, there are areas where travel insurance coverage with your credit card is almost the same as that with a travel insurance provider. Those are: rental cars, luggage, AD&D, flight accident, and emergency travel assistance services.
