Did you know that certain credit cards come with complimentary travel insurance? In this guide, we walk you through all that you need to know about credit card travel insurance – what is it? Is it worth it? How to claim it and more.
A vacation – especially an overseas trip – brings joy and excitement. Everyone looks forward to exploring, relaxing and enjoying with friends and family at new destinations.
But, there are plenty of things that can go wrong on vacation – delayed or cancelled flights, lost luggage, cancelled hotel accommodations, a medical emergency and more. Any of these events can cause your plans to go awry, making you spend a ton of extra money in a foreign land.
Luckily, travel insurance can help you save money and provides you with a safety net if something goes wrong on an overseas vacation. The best premium credit cards and exclusive travel cards offer complimentary travel insurance. These cards reimburse you the costs of a lost/delayed baggage, accommodation costs due to a flight cancellation or delay. They even provide you with the money to return home if your trip is cut short due to a medical emergency.
What is credit card travel insurance?
It’s a travel insurance policy that is offered for free along with your credit card. Note that not all cards offer this feature. Only premium cards and travel-specific cards offer complimentary travel insurance.
You can use the insurance to reimburse the costs of an emergency you encountered while on vacation. Having a credit card with travel insurance means you don’t have to purchase a standalone travel policy before going overseas.
Types of Travel Insurance included on your Credit Card
Most cards that offer complimentary travel insurance coverage provide the following benefits:
- Trip cancellation/delay reimbursement to pay for the losses when your trip doesn’t go as planned
- Flight delay/flight cancellation reimbursement to pay for the cost of booking a new flight or overnight hotel stay due to a flight delay.
- Baggage delay/damaged/lost baggage protection to pay for the losses incurred if your baggage is lost, damaged or delayed. Some plans also reimburse you for the costs of purchasing new clothing and toiletries while you wait to receive your luggage.
- Travel accident insurance provides compensation for an accident/death that occurs while you’re on a trip.
- Medical evacuation coverage – to cover the costs of transporting you to a hospital at your destination or bring you home.
- Car rental insurance to cover the costs incurred if any damages occur to your rental vehicle.
*Note that the actual coverage and extent of coverage depends on the type of credit card you hold. Most credit cards have limitations and exclusions for various coverage. So, make sure to check the benefits on your card to find the actual list of coverage included on it.
How to file a claim on your credit card travel insurance?
Filing a claim with your credit card company is hassle-free. All you have to do is contact your credit card company’s customer care team, connect to the insurance department, and notify your claim.
- In most cases, the claim is authorised immediately, provided you submit the relevant documentation. For example, in case of a flight delay, you will have to submit the email sent by your airline notifying you of the delay.
- Once your claim is approved, the credit card company starts the reimbursement process.
*Ensure that you’re aware of the claims process beforehand to not feel lost during an emergency.
Pros of Credit Card Travel Insurance
- Extensive Coverage
The coverage offered by credit card travel insurance is not only equal to standalone travel plans but very often even better. With a premier card, you can enjoy extensive coverage that will keep you covered against all emergencies during your overseas trip.
- Travel Anywhere
One of the biggest drawbacks of regular standalone travel insurance is that it is applicable only for a specific trip. For example, suppose you’re going on a 5-day vacation to Singapore. In that case, the travel insurance plan you purchase is relevant just for this trip. It won’t cover your subsequent trip to Dubai or elsewhere.
Unlike standalone travel insurance plans, credit card travel insurance isn’t tied to a specific location or trip. You can go on any number of trips and anywhere, without the need to purchase separate travel plans for each trip.
- Enjoy Various Travel Perks
Credit cards that come with travel insurance also offer other travel-related perks like complimentary lounge access, priority boarding and disembarking, extra luggage allowance and more. You can also book partner hotels and activities at special prices using the card.
Cons of Credit Card Travel Insurance
- High Annual Fees
Complimentary travel insurance is available only with premium cards. To qualify for these cards, you have to show proof of high income. Once you get the card, you will also have to pay hefty annual fees.
*The high annual fees are worth it if you’re a frequent traveller who goes on multiple trips overseas. Taking a different travel insurance plan for each trip is more expensive than the annual fee you pay on your card. So, you might end up coming out even if you’re a frequent traveller.
- Steep Interest Rates
If you don’t settle your credit card outstanding balance on time, then you will have to pay high interest on the credit card debt. Though this applies to all cards, it’s a point to keep in mind before choosing a credit card with high annual fees, just to avail of the free travel insurance plan that comes along with it.
- Booking Conditions
Just having a credit card with complimentary travel insurance isn’t enough. You have to book your travel expenses – flights, hotels and other activities – on it to activate the free insurance plan. Generally, most credit cards set a cut-off amount that you have to spend on the card to activate the travel plan. This can put a dampener, especially if you’re looking to go on a budget trip or book your travel expenses using cash or other methods.
Some card providers require you to activate the travel plan before you set on your trip. You will have to notify the card company regarding your upcoming trip so that the travel plan can be activated. If you forget to activate the plan, then you will not be eligible for coverage.
*Make sure to check if your card requires activation beforehand to not miss out on the coverage.
- Doesn’t Cover Domestic Trips
Credit card travel insurance doesn’t cover domestic trips. So, if you’re looking to explore India, then you need to take a separate standalone travel plan that offers coverage domestically.
Is credit card travel insurance worth it?
Credit card travel insurance has both pros and cons. It is indeed a great perk to have. It can offer extensive coverage, even better than standalone travel insurance policies.
The downside is that – you have to pay a higher annual fee on your credit card to get it. Similarly, there are also other conditions that you have to meet to be eligible for it. For instance, credit card travel insurance is applicable only on flights and hotels booked using that card. Also, you may have to spend beyond a particular cut-off amount (say Rs. 1 lakh) on travel expenses to activate the travel insurance that comes along with the card.
Is credit card travel insurance good?
As always, you should read the fine print to decide whether it’s the right choice for you. Make sure to go through the travel coverage offered by the card carefully before applying for it. Do the math. Calculate the annual fees that you pay for the card, limitations and exclusions, to see if it will help you save money in the long run.
If the costs you pay for the card is higher than a standalone travel insurance plan, then it’s better to go for the latter. Before you choose a premium card for the complimentary travel insurance it offers, make sure that you’re getting the best deal on it. If not, you can always opt for a standalone single-trip or multi-trip travel policy to reduce the costs.