Some credit cards offer good travel insurance benefits, and some cards offer little to no benefits. It is a worthwhile investment of time to research what is covered before purchasing a separate trip insurance policy.
Travel Accident Insurance
At first glance, this may seem like a form of coverage for a broken arm or a moderate laceration. However, it is more similar to life insurance and typically only covers death or dismemberment. In the event of accidental death on a plane, bus or train that was paid for with the credit card, the survivors of the cardholder receive the full benefit. Only a partial benefit is awarded for dismemberment of digits or limbs. For this reason, medical travel insurance is still a must.
Trip Cancellation Insurance
If a trip must be cancelled due to an illness or unforeseen event, the non-refundable costs of the trip may be refunded by the credit card company if the expenses were paid for with the card. Cancellations due to preexisting medical conditions are excluded, and only about 15 percent of credit cards offer any form of trip cancellation coverage. Preexisting condition coverage is a wise investment for people with chronic illnesses.
Lost Luggage Insurance
When luggage is lost and the airline will not provide adequate compensation, a credit card company will provide up to a certain amount if the flight was booked using the credit card. This is a great benefit for people who do not have home or renter’s insurance. Always read the fine print with this coverage. Many items from glasses and hearing aids to skis and tennis rackets are often excluded. Additional trip insurance with baggage coverage is a good investment in such an instance.
Rental Car Insurance
Rental car companies often charge upward of $30 per day for collision insurance. Their limit is usually about $35,000. Credit card companies may provide some limited protection for repairs after a collision. Many travel insurance policies offer a more generous coverage limit for about half of the price charged by rental car companies. This is good for anyone who does not have personal auto insurance that covers rental cars.
Credit card companies may also cover lost or destroyed cell phones. Check to see what is covered and excluded. When buying separate travel insurance, choose a plan that covers what the credit card company excludes or lacks.
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