Insurance is one of those things you buy and hope you never need. The right credit card, however, can offer free travel insurance that covers serious issues you might not be willing to pay for otherwise.
Travel insurance is often a free perk of having a credit card, though the benefits vary by card issuer. To be covered, all you have to do is buy an airline ticket or reserve a hotel room, rental car or even Disneyland tickets with the card. If something goes wrong, such as a flight is canceled or delayed by bad weather, you’ll get reimbursed a set amount.
Many credit cards with free travel insurance cover a variety of expenses from unexpected changes to travel plans, such as cancelled flights and lost baggage. Some offer much more.
Trip accident insurance of up to $1 million for loss of life, sight, hearing or limbs may not be something you or a spouse really want to think about, but it’s offered by some credit cards.
The best travel insurance benefit to look for is trip cancellation or interruption coverage. This can be for up to $10,000 per trip, or $5,000 per person per trip. This can come in handy if you’ve made non-refundable reservations.
A trip can be canceled by bad weather, for example, or by you—even if you’re in the middle of a vacation and have to hurry home to attend a funeral. A vacation can also be delayed, such as by severe thunderstorms. A credit card could reimburse you up to $500 per trip for unexpected hotel, food and local transportation expenses from a delay of three hours or more.
Ever have your baggage lost or damaged on a trip? Travel insurance through a credit card can pay up to $3,000 for each person for lost luggage, including up to $500 for jewelry, watches, cameras, video recorders and other electronics. Baggage delay can be reimbursed for up to $100 per day so you can buy essential items. After a three- or six-hour delay, you may be able to get up to $500 back.
Rental car insurance is offered by many credit cards, so paying for it at the car rental counter is usually redundant. Some credit cards offer primary rental car insurance, meaning you don’t have to file a claim with your auto insurer and possibly see your insurance rates rise later.
The rental car insurance through a credit card may cover damage to your vehicle while you’re driving, but may not include liability insurance. So, if you damage another driver’s car and they’re injured, you may be responsible for those costs.