You’ve spent a lot of money (or points) on your travel, but what happens if a wrench gets thrown in your plan? If you have trip-cancellation, interruption, or delay insurance, you might be able to get a reimbursement for some or all of your expenses.
First, though, you’ll need to understand how this valuable credit card perk works.
What Is Credit Card Trip Insurance?
One of the most common perks among travel credit cards is trip insurance.
There are three main types of trip insurance credit cards offer: interruption, trip cancellation, and delay. Most cards that offer this perk offer two or even three of these options, and often each credit card has its own set of rules for these insurances.
In order to get these insurance coverages, you’ll need to pay for the cost of the trip either with your card or with rewards points from your card. Generally, you, your spouse, and your dependent children are covered and, in some cases, extended family is covered, too. Some cards extend your trip coverage to “traveling companions”—other people who you’ve paid to travel with you or your family.
How Does Trip Cancellation Insurance Work?
Trip cancellation insurance covers you if your entire trip is cancelled before you even set foot out the door. In order to be eligible, the cancellation will need to be for a reason outside of your control, such as severe weather, an accident or illness, or being called for jury duty. If you sleep in and miss your flight or get caught in traffic, you generally won’t be covered.
If you are covered, though, you’ll need to contact any travel companies you’ve paid, like the airline, hotel, or rental car agency that you’ve made a booking with, to see if you can get a refund. If you can’t, you’ll typically have anywhere from 20 to 60 days to notify your card’s benefits administrator that you want to file a claim. You can do this by calling up the number on the back of your card or visiting its website.
If you book a trip with points, you’re usually still eligible for reimbursement. However, you might get the cash value of the booking back, rather than the having points redeposited into your account.
The Chase Sapphire Preferred is an example of a card that offers trip cancellation insurance. Here’s a rundown of the policy basics:
- What is covered: Non-refundable trips of 60 days or less
- Who is covered: You and family members (spouse, children, parents, grandparents, etc.)
- Reimbursement amount: Up to $10,000 per person, $20,000 per trip, and $40,000 per year.
How Does Trip Interruption Insurance Work?
Trip interruption insurance covers you if your trip is delayed or cancelled while you’re traveling. If you miss a connecting flight, for example, or don’t make it back to your cruise ship in time for departure, you might use this policy.
Trip interruption insurance can reimburse you for expenses related to missed connections or, in some cases, for booking alternative travel. The Chase Sapphire Reserve card pays up to $250 for ground transportation for you to catch up with the next leg of your trip, for example. So, if you miss the cruise ship, you might be able to take a train to the next port of call.
The U.S. Bank Altitude Reserve is a good example of a card offering trip interruption insurance:
- What is covered: Non-refundable passenger fares on common carriers, but not taxis, limousines, commuter trains, or commuter bus lines.
- Who is covered: You, your spouse, and dependent children
- Reimbursement amount: Up to $2,000
Some of the exclusions you may see in your trip interruption coverage documents include interruptions resulting from a preexisting condition, cosmetic surgery, a traveler being under the influence of drugs or alcohol, and someone traveling against medical advice.
How Does Trip Delay Reimbursement Work?
Trip delay reimbursement and trip interruption insurance seem redundant, but they provide two different types of help. While trip interruption insurance refunds you for missed connections or returning home earlier than expected, trip delay reimbursement pays for “reasonable” things you need while you’re delayed. Generally, a trip is “delayed” if it’s put off for more than six or 12 hours, depending on your card’s policies.
For example, if you get caught in a snowstorm and your flight is delayed until the next day, you might need to pay for a hotel and buy toiletries and meals. You could file for a trip delay reimbursement for your hotel, toiletries, and food by contacting your card’s benefits administrator. You’ll likely need to provide receipts or other documentation that they request.
The World of Hyatt Card’s trip delay insurance is indicative of the type of coverage you can expect from a card:
- What is covered: Common carrier trips delayed by more than 12 hours or that require an overnight stay; unreimbursed expenses related to the delay up to $500 per ticket
- Who is covered: You, your spouse or domestic partner, and dependent children under 22 years old
Credit Card Trip Insurance vs. Regular Travel Insurance
Credit card trip insurance isn’t your only option when it comes to protecting all of the money you’ve spent on your trip. You can also purchase third-party travel insurance plans, which are generally more comprehensive.
In order to know whether credit card trip insurance is enough, it’s important to take a look at your card’s guide to benefits before you book your trip. Each plan is different, but here are some questions that can help you key in on if you have enough coverage:
- Who is covered? If you’ll be taking other people with you, make sure your insurance covers them.
- What are the coverage limits? Credit card insurance isn’t infinite; make sure you know your coverage limits.
- Which expenses are covered? Some policies only cover cancelled expenses for “common carriers'' like prepaid airplane, train, or cruise tickets, but not hotels, events, or rental cars. Make sure you know if all your costs are covered.
- Which types of cancellations are covered? Think about the reasons why you might miss a trip, and check to see whether you’re covered if you cancel a trip for this reason.
- What are the exclusions? Some companies exclude cancellations due to skydiving accidents, travel for professional athletes, or “disinclination to travel due to civil unrest,” for example.
Credit card trip insurance can be a great backup and prevent you from losing thousands of dollars. But if you think there’s a decent chance you won’t be covered due to rules in your card’s policies, or if it would give you more peace of mind, it can be well worth purchasing an additional travel insurance policy.
Although most third-party travel insurance is more comprehensive than credit card insurance, the policies still generally don’t cover “foreseen” events such as the coronavirus pandemic. Thus, if you book a trip now and infection numbers go up, you won’t be covered if you cancel your trip due to pandemic conditions.
- Trip cancellation insurance and interruption insurance may refund you if your trip is cancelled or delayed.
- Trip delay insurance reimburses you for things you need to tide you over during trip delays.
- Travel insurance that you buy separately is generally more comprehensive than your card’s free insurance.