How Does Travel Insurance Work?

Travel insurance reimburses you for expenses covered by your plan if your trip is canceled, delayed, or interrupted due to circumstances out of your control. For example, if a severe thunderstorm causes your flight to be canceled, your travel insurance will typically cover the costs. However, if you miss your flight because you overslept, you won’t be covered.

To qualify for reimbursement, expenses typically need to be non-refundable, and you must pay for them with a credit card that includes travel insurance. Coverage amounts, terms, and conditions vary depending on the card, so it’s essential to keep all your receipts and act quickly if you need to file a claim.

What Does Credit Card Travel Insurance Cover?

Credit card travel insurance can cover various aspects of your trip, depending on the card you have. Here are some common protections:

Trip Cancellation and Interruption

This benefit kicks in when you must end your trip early or cancel it altogether due to unforeseen circumstances like illness, injury, or severe weather. You’ll only be reimbursed for the portion of the trip you miss, not the entire trip.

Trip Delay

If your flight is delayed, this benefit reimburses you for additional expenses like hotel stays or meals while you wait. Your original flight must typically be delayed by a certain number of hours to qualify for reimbursement.

Lost or Damaged Luggage

This benefit reimburses you for items in your bags if they are lost or damaged. However, not all items qualify; typically, clothing and toiletries are covered, but jewelry and electronics are not.

Rental Car Insurance

If your rental car is stolen or damaged, some credit card travel insurance plans offer coverage. To qualify, you usually need to waive collision coverage from the rental company. Note that this coverage only pays for physical damage or theft, not liability to other drivers or injuries.

Medical and Evacuation

If you get sick or hurt while traveling abroad, this benefit can help cover your medical costs if your primary insurance won’t. It may also cover transportation to a medical facility if you can’t receive the treatment you need in your current location.

Travel Accident Insurance

If you are seriously injured, maimed, or die on your trip, this benefit may pay you or your beneficiaries. Payment amounts vary by card, and eligibility depends on the extent of the injury and where it occurred.

Travel and Emergency Assistance

This service can help you navigate emergencies while traveling, such as finding nearby doctors, dentists, and hospitals, or getting prescription assistance. However, the cost of all services you receive is your responsibility.

What Doesn’t Credit Card Travel Insurance Cover?

While credit card travel insurance can provide some protection, it doesn’t cover everything. Common exclusions include:

• Travel for medical treatment
• Pre-existing conditions
• A change of heart
• Adventure trips
• Pandemics
• War
• Substance abuse

Which Credit Cards Offer Travel Insurance?

Not all credit cards offer travel insurance. It’s typically available with general travel cards, airline cards, hotel cards, and other premium credit cards. Many of these cards charge an annual fee, so it’s essential to ensure that the benefits outweigh the cost.

Is Credit Card Travel Insurance Worth It?

Whether credit card travel insurance is worth it depends on your perspective. In 2023, 1 in 5 U.S. flights was delayed. Without travel insurance, you may have no way to recoup the money you paid for non-refundable expenses if your trip is disrupted. However, if your credit card offers travel insurance, you may be able to get some or all of your money back.

The Bottom Line

Credit card travel insurance can help protect you from financial losses if your plans are disrupted due to circumstances beyond your control. However, it’s crucial to understand what your policy will and won’t cover before your trip begins. If you travel extensively, a stand-alone travel insurance policy with more comprehensive coverage may be worth considering.

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