Let’s spend a moment talking about travel insurance, whether you truly need it, and how you might get it included from your credit card.

What is travel insurance?

These days it can feel like insurance is a little bit of a dirty word. You never know in advance if you truly need it, so if you never take advantage of what you paid for, it might feel like you wasted money. The rarer the event, the more likely you might feel that way. But if the event does occur and you need coverage, you’ll be happy with purchasing. Thus, if the event is only 10% likely to happen, up to 90% of people who bought it might feel they wasted their money.

With that out of the way, what specifically is travel insurance? It’s coverage that will assist you if you encounter bumps along the way during your travel. Specifically, you can think of coverage as the following components:

• Trip cancellation/interruption — can assist you with pre-paid, non-refundable purchases made for your trip up to stated limits
• Travel delay — will reimburse you for losses in the event of a delay
• Baggage delay — if your bags don’t arrive when you arrive, you might need some new clothes or toiletries to tide you over until they arrive
• Baggage loss/damage — can help with a lost bag from a travel provider or theft
• Travel medical insurance — helps you get (and afford) the medical coverage you might need while abroad
• Car rental insurance — covers you in the event of damage to the vehicle or others

We’ll talk more about travel health insurance and car rental insurance in more detail in separate future posts.

Remember that typically travel insurance is only for named perils, which means it only covers the specific reasons named in your purchase. Importantly. make sure you read the terms of your coverage before you buy it.

Why do you need it?

Now that we have a little bit of understanding of what travel insurance is, why would you end up needing it? Obviously peace of mind is one of the top considerations. If you’ve spent a lot on your trip on non-refundable airfare and hotel reservations, on concerts or special events, or on excursions and nice meals, you might want it covered in the event you can’t do it.

However, you should consider if purchasing refundable airfare and hotel reservations from the start is cheaper than stacking insurance on top. That’s generally true for hotel reservations, but note they still might not allow canceling for free within a day. For other non-refundable expenses, you could try selling or giving it to someone else (we’ve done this before) instead of seeking insurance for a higher covered amount.

Another possible reason you need travel insurance is simply because your destination requires it. Admittedly, this applies more for travel medical insurance, but it’s still important to understand the terms of entry for your destination. This might apply only if you’re seeking a visa (like the Schengen Area) or for all travelers (like Fiji).

Who offers travel insurance?

There are a number of insurance providers working the travel space. We have purchased coverage on a previous trip (through Trawick International) but never needed to claim benefits so we can’t speak to the ease of reimbursement. There are plenty others, and more out there than I’m aware of (listed alphabetically):

• AIG Travel Guard
• Allianz Travel
• Faye
• Seven Corners
• World Nomads

Disclaimer: while it might sound like I’m pitching for Trawick, it just happened to be cheapest price for what we needed on our particular trip. It’s somewhat erroneous to provide sample premiums as what you need covered might differ from someone else’s needs. So be sure to shop around on your own to make that determination. We don’t earn any commission from the companies listed above.

Which credit cards include travel insurance with your purchase?

Those who are into ultra-premium credit cards might already know that some coverage is already included when you purchase your ticket. But remember that you must purchase your travel with that credit card for the protections to apply. Experience a travel delay on a flight that makes you overnight at a hotel? You’ll need to purchase both the flight and hotel on that card for coverage to apply.

What about when you purchase your travel with points and miles? The general rule of thumb is to not use an American Express credit/charge card as you won’t be protected by just paying the taxes or fees. However, other ultra-premium cards will generally offer coverage on your award flights.

What you’ll also notice is a general lack of medical insurance benefits. There are some medical evacuation benefits (useful if you’re on the Maldives and need to be airlifted to a hospital). And the Chase cards offer a basic amount of medical or dental coverage. But outside that, you’re not going to find much.

Let’s run through the options:

American Express

While you can earn a lot of points with American Express, travel protections are a weaker aspect of their cards. This coverage applies for their Platinum card (both business and personal), the Delta Reserve card (both business and personal), the Bonvoy Brilliant card, and the Hilton Aspire card. Notably, coverage does not apply if you just pay the taxes and fees on an award. And you won’t get flight benefits unless you book the whole roundtrip fare. Ouch.

• Trip cancellation/interruption: Up to $10,000/trip (max $20,000/year)
• Trip delay: Up to $500/trip for delays more than 6 hours
• Lost luggage: Up to $3,000/passenger
• Travel accident insurance: Up to $500,000
• Medical evacuation: No stated limit (but only available to Platinum cardholders)
• Rental car insurance: Secondary coverage up to $75,000 worldwide

Captial One

The Capital One Venture X has plenty going for it with its fair annual fee and lounge benefits. The good news is that it does offer some protections. Coverage applies even if you just pay the taxes and fees on award flights.

• Trip cancellation/interruption: Up to $2,000/person
• Trip delay: Up to $500/ticket for delays more than six hours or with an overnight stay
• Lost luggage: Up to $3,000/trip, except New York residents get up to $2,000/bag
• Travel accident: Up to $1,000,000 (not valid on points bookings)
• Rental car insurance: Primary coverage up to $75,000 worldwide

Chase

If you’re a chase enthusiast, you’re in luck. Both the Chase Sapphire Reserve and Chase Sapphire Preferred offer some of the best travel protections out there. The Ritz Carlton Card has the same protections as the Reserve. But the Chase Sapphire Preferred gets the slight nod due to its relatively cheap annual fee ($95). Coverage applies even if you just pay the taxes and fees on award flights.

• Trip cancellation/interruption: Up to $10,000/person and $20,000/trip (max $40,000/year)
• Trip delay: Up to $500/person for delays more than six hours (for the Reserve and Ritz, 12 hours for the Sapphire) or with an overnight stay
• Baggage delay: Up to $100/day (max 5 days) for delays more than six hours
• Lost luggage: Up to $3,000/passenger, except New York residents ($2,000/bag, max of $10,000/trip)
• Travel accident: Up to $1,000,000
• Medical evacuation: Up to $100,000
• Emergency medical or dental: Up to $2,500/person/trip
• Rental car insurance: Primary coverage up to $75,000 (for Reserve) or $60,000 (for Preferred) worldwide. New York residents who have personal auto insurance, coverage is secondary.

Citi

Wouldn’t you know it that the Citi Strata cards don’t offer any notable travel protections. You have to look at the AA Executive Card to find benefits if you’re loyal to Citi. Sadly, there’s not as many benefits as other ultra-premium cards. Coverage applies even if you just pay the taxes and fees on award flights.

• Trip cancellation/interruption: The lesser of $5,000/person or the amount charged to your card
• Trip delay: Up to $500/ticket for delays more than six hours
• Lost luggage: Up to $3,000/trip, except New York residents get up to $2,000/bag (max of $10,000/trip)
• Rental car insurance: Secondary coverage domestically, primary coverage internationally, up to $75,000

What about from the airline or hotel?

When purchase airfare or hotel stays from your travel provider, you might see a note about how you can purchase travel insurance. We do not recommend you take them up on that offer. A few reasons why:

• Coverage comes from a different company, and Delta (as an example) isn’t the one you’d be working with if you have a claim. Purchasing coverage through the checkout screen doesn’t make it more likely for your claim to be approved.
• You’re likely paying for admin expenses twice when purchasing this coverage. Once for the company offering the benefit, and once more for the airline or hotel group.
• If you purchased your flight with points and miles, your cancelation fees might be cheaper than the coverage offered (or even free).
• You’re not given a choice of a policy, which might not cover what you truly need.
• You might already get it covered based on the credit card you use (see above).

Our recommendation instead is to first use the correct credit card that works for your needs. If that’s not sufficient, purchase some personalized coverage straight from the travel insurance carrier. If travel medical insurance is what you’re after, use a qualifying Chase card or purchase your own coverage. And while we hope you never have to use the coverage, there’s a fair chance you might have to one day. Having that peace of mind could change a trip from a nightmare to just an inconvenience.

Suggested reading:

• How to Book Award Travel Like a Pro
• Keep or Cancel: How to Handle Too Many Credit Cards
• Pro Tip: Keeping Your Credit Cards Open With Five Simple Tasks