Easy money: How to use your credit card's travel insurance

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Easy money: How to use your credit card's travel insurance

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Credit card companies often try to lure in new customers with flashy travel perks like trip credits, hotel upgrades, airline miles and more. But some credit cards provide an extremely valuable benefit that frequently goes overlooked: travel insurance.

Travel insurance and its subsets (baggage delay insurance, car rental coverage, etc.) can help you recover losses that may occur before or during a trip. Certain cards include these benefits, but the coverage often goes underutilized as many cardholders may have certain travel insurance and not even realize it.

If you have travel insurance built into your credit card, it’s important to note its applications — and limitations. Here we’ll break down the typical types of travel insurance provided by credit cards, and how you actually go about using that coverage.

Check your benefits

Just because you have a credit card doesn’t mean you have travel insurance. These benefits are more common among travel rewards credit cards. Still, you shouldn’t assume your card doesn’t provide any type of coverage either.

Instead, review your card's benefits guide to identify the types of coverage provided and how to initiate a claim with its benefits administrator. Your benefits guide should also explain coverage limits. That includes:

  • the maximum dollar amount in losses covered
  • exceptions to coverage
  • the types of losses that aren’t covered
  • how much time you have to submit a claim

Typically, a covered trip is defined as occurring at least one mile from your home residence and lasting less than 60 days.

“Not all travel insurance credit cards are created equal. Reimbursements, terms, coverage, limits and claims will vary by credit card,” Stephanie Bolling, personal finance expert at The Penny Hoarder, says. “The best way to know exactly what coverage your credit card offers is to read all the fine print and call the company with any questions before making any decisions or purchases.”

If your credit card doesn’t have robust travel insurance, you may want to look into getting it for yourself before you book your next big trip. It’s a good idea, especially if you are booking non-refundable reservations or traveling overseas. Most health care plans have limitations on the types of treatment covered abroad and most credit cards don't carry travel health insurance. We can help you compare quotes across travel insurance companies.

Prepare to use your card .. & save receipts

Typically, you have to charge all or some of your travel-related expenses on your credit card to receive any type of coverage. There are sometimes exceptions to this rule, which should be explained in your credit card’s benefits guide.

Genius tip: Weigh the pros and cons of putting travel expenses on your credit card. Namely, if you charge more trip than you can actually afford, you’ll pay interest on any balance you carry from month to month.

If you charge your trip and are relying on its protection, keep good records and prepare for a potentially onerous claims process.

“You’ll be on the hook for any upfront expenses and will need to file a claim through your credit card company to receive reimbursement,” Bolling says. “They will verify that your claim meets their coverage criteria before reimbursing you any money.”

Claim forms require information regarding your itinerary, purchases made on your credit card and details related to your loss. You may also need to provide documents proving that the loss occurred, receipts for reimbursements, correspondence from travel providers and other documentation.

In other words, it’s a good idea to save all paperwork related to the trip, just in case you need to file a claim.

The types of credit card travel insurance (& how to use them)

There are many types of insurance provided by credit cards that help cover vacations. Here are some of the most common types, and how to use them.

Trip interruption & trip cancellation insurance

Trip interruption and trip cancellation insurance works exactly the way it sounds. It reimburses losses when your trip is interrupted or cancelled for a covered reason.

Covered reasons typically include illness, severe weather, jury duty that can’t be postponed and financial insolvency of the travel agency or travel provider. Both you and your immediate family members are sometimes covered, up to a certain dollar amount.

Notable and common exclusions include changes in plans due to scheduling, financial difficulty or health problems related to a pre-existing condition.

If your trip is cancelled or interrupted for a covered reason, your issuer should reimburse you for any unrecoverable losses, such as flights and hotel reservations. However, you generally haave to pursue refunds from your travel providers first.

Check out our airline-by-airline guide for more on flight delays, cancellations and baggage policies by major carrier.

How to file a claim: Report your loss to the benefits administrator within the required time frame to receive a claim form. Alternately, download a claim form directly from your credit card’s online account.

Provide all pertinent information. Issuers usually request details regarding your intended dates of travel, the losses you are attempting to recoup and the relevant purchase(s) made on your card. You typically need to supply documentation that proves the travel providers won’t refund your money, such as a letter or email from the airline or hotel. You might also need a doctor’s note if you canceled your trip due to illness.

File the claim as soon as possible.

“Call the credit card company within 60 days of cancellation or interruption,” Bolling says, adding that timeframe is sometimes shorter, depending on the credit card company.

Trip delay insurance

Trip delay insurance reimburses expenses such as meals, lodging, toiletries and transportation costs incurred due to travel delays above a specified number of hours. For example, if your flight is delayed overnight due to inclement weather, trip delay insurance may reimburse you for related expenses through the next morning.

You will have to pay these costs upfront — and most trip delay insurance only covers "reasonable expenses". In other words, if you want to stay at the Hilton and order $300 in room service, the credit company is unlikely to reimburse you.

How to file a claim: The process is largely the same as filing a claim for trip interruption and trip cancellation. Again, be ready to provide receipts for all expenses you want reimbursed and documentation from the travel provider related to the delay.

Lost baggage & baggage delay insurance

If your baggage is lost or delayed by a carrier such as an airline, cruise ship or rail company, lost baggage insurance or baggage delay insurance might apply. These two types of insurance work in different ways:

Lost baggage insurance provides reimbursement for costs to repair or replace lost baggage up to a certain amount. Exceptions include cash, checks, tickets or furs.

Baggage delay insurance provides reimbursement for purchases of essential items like clothes, toiletries and cell phone chargers when a carrier delays your baggage for more than a specified amount of time. Non-covered items may include cash, checks, contact lenses, eyeglasses and hearing aids.

How to file a claim: “If your baggage is delayed, you will need to notify the airline and fill out a report before you leave the airport,” Bolling says. “You will receive documentation about the delay from the airline. All receipts from purchases made due to a delayed bag must be saved and [sent] with your claim.”

Travel accident insurance

Travel accident insurance covers you or your immediate family members in the event of accidental death or dismemberment while traveling. Policies may cover death, dismemberment, and the loss of speech, sight or hearing due to an accident that occurred during a trip.

In the case of an accident suffered by you or an immediate family member, benefits would be paid in addition to any life insurance or accidental death and dismemberment policies you already have.

How to file a claim: Typically, accident insurance will cover accidents that occurred while riding on a covered carrier or experienced during other parts of the trip. A claim must be filed within a certain number of days after the occurence, along with a copy of the trip itinerary and a police report regarding the accident.

Car rental insurance

Car rental insurance covers physical damage to or theft of a rental vehicle, reasonable towing charges and loss-of-use charges imposed by the auto rental company. This coverage kicks in when you use your credit card to pay for the rental car. Plus, you generally have to decline the rental company’s offer of additional coverage to receive this benefit.

Typical exceptions include recreational vehicles, motorcycles, exotic cars and more. If you have car insurance that applies to rentals, this additional coverage may only reimburse you for its deductibles. Unlike other forms of travel insurance, you don’t have to be on a trip out of town to take advantage of this coverage.

Renting a ride? Our guide to car rental insurance can help you pin down whether you need to purchase a standalone policy from the car rental company.

How to file a claim: You should file a claim with the benefits administrator shortly after the loss occurs. You will need to submit the rental agreement, the accident report and a copy of the repair bill. Most of these documents are provided directly by the rental company.

Recommended reading:

  • First on our list of recommended reading: your own credit card’s statement of benefits. This is the best resource for learning the details of what, if any, travel insurance policies your credit card provides — and, if so, how much coverage you're entitled to.
  • Want to purchase your own trip coverage? Check out our guide on how to get started.
  • The U.S. Department of State has a wealth of tips for safe international travel, as well as insights into the safest international travel destinations.
  • Depart Smart, a travel safety nonprofit, offers free training resources for anyone headed overseas.


To learn more about the organization, check out our interview with its founder Sheryl Hill.

Image: Nuthawut Somsuk