Travel Insurance Vs Credit Card Coverage: What’s the Difference?

Travel insurance vs credit card coverage: What is the difference?

Planning a trip? You want to ensure you have adequate financial protection for your money and any money you might need in an emergency.

Many credit cards, particularly premium cards targeted at frequent travellers, offer a range of travel insurance protection to provide coverage in the event of an emergency. Is credit card coverage as good as purchasing your own travel insurance policy?

Third-party benefits administrators provide most travel insurance benefits via a credit card. Be sure to fully understand the terms and conditions of your credit card’s travel insurance coverage before you rely on it. You should also read the policy carefully if you decide to purchase travel insurance.

Here are the main differences between travel insurance and credit card benefits.

Similar: Compare Travel Insurance Quotes from More Than 22 Providers

Trip Cancellation Insurance

Trip cancellation insurance covers 100% of any non-refundable, pre-paid travel expenses you incur if your trip is cancelled for reasons beyond your control. These cancellations are often due to sickness, injury, severe weather or military deployment.

Credit cards

Your credit card will provide cancellation insurance when you book your trip on a common carrier such as an airline, cruise ship, bus or train operator.

Some credit cards require that you pay for your entire round-trip travel with the card to be eligible for trip cancellation coverage. Others offer coverage for single-way bookings. Credit card coverage amounts are typically limited to $10,000 per trip, with additional limitations on the number and severity of claims within a given year.

Similar: The Best Travel Insurance Benefits of 2021: Credit Cards

Travel insurance

Travel insurance policies will reimburse 100% of the money you have lost in non-refundable and pre-paid deposits. It doesn’t matter how much you paid for your trip. You can still ensure the entire cost of your trip if you have multiple credit cards. This allows you to be more flexible in how you pay for your trip deposit payments.

You can ensure your expensive trip fully with a travel insurance policy without having to pay a lot of interest on certain credit cards.

You can add an optional feature to your travel insurance that you won’t find on a credit card: cancellation for any reason coverage. You can cancel your trip at any time, for any reason other than what is listed in your base policy. The travel insurance company may offer a 50% or 75% refund under a “cancel any reason” claim.

Similar: Compare Travel Insurance Quotes from More Than 22 Providers

Trip Delay Reimbursement

Credit cards

Trip delay insurance on credit cards can help you cover travel expenses if your trip is delayed or cancelled due to a delay in a train, flight or cruise. Credit card coverage can cover essential expenses such as overnight accommodation, meals, and transportation.

Credit cards typically only provide trip delay coverage if there is a delay of 6 to 12 hours or more, and the benefits are usually limited to $500 per covered trip.

Some credit cards require you to book round-trip travel with a common carrier using your card to be eligible for coverage.

Travel insurance

You must also allow a certain amount of time for travel insurance to be effective. However, you may find policies that do not require a minimum time delay.

The John Hancock Insurance Agency’s Silver and Gold travel insurance plans have a minimum of three hours of travel delay coverage. These policies offer a higher total maximum reimbursement than typical credit cards: $1,000 for the Gold plan and $750 for the Silver plan. Some travel insurance plans offer greater travel delay coverage, such as $2,000 through Trawick International’s Safe Travels Voyager policy.

Travel Medical Insurance

Credit cards

Credit cards do not usually offer travel medical insurance.

Travel insurance

A travel medical plan can include a valuable component called travel insurance. Travel medical insurance will pay for hospital bills, medication, and ambulance services if you are injured or become sick while on vacation.

Check the coverage of your U.S.-based healthcare plan if you are planning to travel internationally. You may not be covered by it outside the United States. Medicare doesn’t cover medical care in the U.S., so travel insurance is a must for seniors.

Travel insurance policies can be purchased with high levels of coverage, such as $500,000 per individual. You should ensure that your policy covers Covid-related medical expenses if you are concerned about getting Covid overseas.

Emergency Medical Evacuation

The coverage for emergency evacuation typically covers the cost of transport and emergency evacuation in severe medical emergencies. This coverage can cover medevac transport and other medical services that are necessary to maintain life.

Credit cards

Credit cards offer a variety of services and coverage options. Some credit cards provide coverage up to $100,000 for medical evacuation, while others offer coverage up to $10,000.

Preauthorization is required for emergency evacuation services. Coordinate with your card’s benefits coordinator.

Travel insurance

There are travel insurance plans that offer generous amounts of medical evacuation coverage. These limits are much more than you would get with a credit card. Plans with $1,000,000 in medical evacuation coverage, for example, are available through AIG’s Travel Guard plans.

If your condition calls for you to return to the U.S., these medical evacuation benefits provide repatriation.

Baggage lost, damaged or delayed.

Baggage insurance protects against damage, loss, or delay to items in checked baggage or carry-on luggage while in transit to, at, or travelling with a common carrier.

Credit cards

A credit card’s baggage loss and damage coverage pay for the actual cash value, often up to $3,000 per person, of any damaged items while in transit.

Baggage delay insurance for credit cards covers the cost of replacement clothes and toiletries and other expenses due to the delay. The coverage is usually limited to $100 per day and can be extended up to five days.

Baggage insurance does not cover normal wear and tear on luggage or certain high-value objects. Not only are jewellery, cash, fur coats, and obvious valuables excluded, but so are items such as sporting equipment, computers and eyeglasses. Baggage insurance is often secondary insurance. This means that you will need to file a claim with your common carrier before they pay claims.

Similar: The Best Travel Insurance Benefits of 2021: Credit Cards

Travel insurance

A travel insurance policy provides baggage and personal effects coverage. This coverage is similar to credit card protection, but it also covers your belongings while not in transit. You could claim baggage or personal effects coverage if your luggage is stolen from a hotel room.

Pay attention to per-item limits. These can range from $50 to $250 per article.

Like credit card coverage for baggage, the insurance coverage from a travel plan is often secondary. You would first need to file a claim under your existing coverage, like your home insurance.

Comprehensive travel insurance plans can include baggage delay insurance. You can also get more coverage with a travel plan. April International’s VIP Plan provides $750 per person to cover baggage delays, but a 24-hour delay is required to file a claim.

Travel Assistance Services

Credit cards

Many credit cards provide some global assistance service. These services may include sending money to you immediately, sending replacement credit cards, or wiring money to your account in an emergency.

Numerous credit card travel assistance programs also offer consular referrals and passport replacement assistance. At the same time, it is important to be connected with help while on the road; these services do not provide insurance. They only refer, but they don’t cover the costs of the services.

Many credit cards offer concierge services that you can use while travelling or at home. The concierge can help you with reservations at restaurants, tickets for events and recommendations for local activities.

Travel insurance

Access to a global 24/7 assistance line will be included in your travel insurance policy. It is similar to a credit card. This assistance will help you find a doctor or pharmacy on your trip, replace damaged eyeglasses, and assist you with currency conversion.

Concierge services are available on some travel insurance plans. ExactCare plans offered by Berkshire Hathaway Travel Protection include concierge services such as booking restaurant reservations, floral services, and tee times.

Do you need travel insurance?

Credit cards may offer some coverage if you are looking for travel insurance. Some credit cards that have no annual fees offer travel benefits. If you can reduce the cost of travel insurance, the annual fees for premium credit cards that offer coverage may be offset.

Travel insurance often offers greater coverage than a credit card. International travellers will find it crucial to have travel insurance that covers medical expenses.

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