Comparison between Separate Travel Insurance and Credit Card Travel Insurance

Everyone wants to sell you a travel insurance coverage these days. When you arrange your vacation, airlines and online booking services offer coverage as an add-on. Travel insurance is one of the many perks that premium credit cards provide as part of the yearly charge. Of course, traditional plans are also available for purchase straight from insurance firms.

What All Travel Policies Share

First and foremost, travel insurance serves as protection from unplanned or abrupt events. Because Covid-19 is a recognized risk, most plans do not cover travel cancellation or interruption costs connected to a fear of or probable exposure to it (there are few exceptions, which we’ll describe).

Second, there are deadlines for making claims that apply to all plans. To be safe, file your claim no later than 30 days after the occurrence, but in some circumstances you may have more time. Then you’ll have more time to gather and submit any necessary supporting paperwork. Expect to provide a thorough documentation trail outlining what occurred and any associated costs. Receipts cannot be negotiated.

Last but not least, coverage is worthless whenever it results from criminal action. If drink or drugs had a role in the occurrence, you can also be rejected. As usual, prevention may be preferable to treatment. And while if some hobbies, like skydiving, are lawful, a “adventurous activity” restriction may prevent you from getting insurance coverage. Before you leap, make sure your insurance will cover you.

Travel Insurance through Credit Card

Travel perks are promoted by credit cards as a means to provide value in exchange for yearly fees. The Chase Sapphire Preferred® Card, Chase Sapphire Reserve®, and The Platinum Card® from American Express (Terms apply) are the three well-known credit cards that are being contrasted here.

To be eligible for coverage with any of these cards, your trip transportation (such as an airline ticket, cruise, package tour, or rail ticket) must be paid for using a credit card. Additionally, you must still be a cardholder and have a valid account when you submit your claim. In the event that you used your card to pay for their travel, immediate family members are protected. Watch out for the minimum age requirements for children: these vary not just by card but also by benefit. All benefits apply to children under the age of 18, however certain advantages also apply to older adult children who are enrolled in school.

Travel insurance with Chase Sapphire Preferred

One uncommon credit card that provides travel insurance without a prohibitively high annual charge is the Chase Sapphire Preferred® Card. For just $95 a year in annual fees, this mid-range card offers a number of outstanding advantages.

The card’s Collision Damage Waiver (CDW) for auto rentals is one of its most powerful perks. If you rent a car, use your Sapphire Preferred card to pay and opt out of the CDW insurance offered by the rental company to be automatically protected. This insurance is primary, so it will cover payments for theft or unintentional damage before your home vehicle insurance kicks in.

Keep in mind that it excludes liability for damages to other property (such a second automobile in a crash), medical costs, or attorney fees. Be sure you understand what is and is not covered before renting that Tesla. The Preferred’s CDW also contains restrictions regarding luxury, sports, and electric automobiles that might cause you unforeseen problems.

Trip Cancellation and Trip Interruption Insurance is an additional worthwhile advantage that is covered. If you have to abruptly cancel or shorten your vacation (vacation Cancellation or Trip Interruption), this coverage will compensate you for nonrefundable, pre-paid expenditures you spent. Up to $20,000 per trip and $40,000 yearly can be reimbursed, with a cap of $10,000 per insured passenger. Hospitalization or the passing of a close relative, specific storm forecasts, court subpoenas, or terrorist activities are a few examples of covered circumstances.

Accidental Death & Dismemberment insurance, often known as Travel Accident Insurance, is the card’s final significant coverage. If you suffer a loss of sight, hearing, speech, a limb, or life while traveling, this insurance will pay a flat payment. However, it solely addresses unintentional demise from a fall or automobile accident. Unless the loss occurs while using a common carrier (for instance, while in flight), in which case the coverage increases to $500,000, the maximum amount of coverage is $100,000.

For lesser sums, The Sapphire Preferred also provides a number of insurance options. Although the maximum payout for these benefits ranges from $500 to $3,000, they cover often occurring occurrences, so you could find them useful.

At some point or another, all travelers have encountered travel delays, such as when a flight is canceled or a connection is missed due to a rainstorm. If you have the Chase Sapphire Preferred® Card, you can receive up to $500 back per ticket if you are delayed for 12+ hours or overnight for an eligible reason (most frequently because of mechanical or severe weather conditions). It will pay for expenses like hotel rooms, cabs, and food.

To allow you to make purchases while you wait for your luggage to arrive, the card also gives insurance up to $3,000 per insured passenger per trip for lost luggage or $500 for delayed luggage ($100 per day for up to five days).

Venture X Travel Insurance from Capital One

The Capital One Venture X Rewards Credit Card is another card offering a broad range of travel perks, so it can be a good choice for your wallet. Although the insurance features alone might cost more than that if purchased individually, it has an annual premium of $395. Trip cancellation and interruption benefits6, trip delay reimbursements6, travel accident insurance6, lost luggage reimbursement6, and rental vehicle collision damage waivers6 are a few of the included travel safeguards.

When the unexpected happens, trip cancellation and interruption insurance can be of great assistance, but it’s important to note that the benefits are rather constrained. You may get up to $2,000 per qualifying passenger toward the cost of common carrier tickets if the reason for your cancellation is covered, such as your own death or the sickness of a close relative. Hotel stays are an example of an additional prepaid expenditure that is not reimbursable.

Reimbursement caps for lost luggage and flight delays are considerably more fair. If your travel is delayed by six hours or more (overnight delays are automatically included), you may be entitled to earn up to $500 per ticket for qualified expenditures. You are covered for up to $3,000 toward the price of new products if your luggage is lost. However, delayed baggage are not at all protected.

On the other hand, the Venture X comes with very substantial travel accident insurance. The most that may be claimed is $1,000,000 per passenger for each covered cause, such as the unintentional loss of life, limb, sight, hearing, or speech while using a common carrier.

The Collision Damage Waiver for Auto Rentals is also effective. Protections serve as your primary insurance and cover rentals for up to 31 days abroad or 15 days domestically. Although most vehicles are covered, rentals in Israel, Jamaica, Ireland, and Northern Ireland are not included, nor are premium automobiles (defined as those with an MSRP of more than $75,000 when new), exotic cars, vans, lorries, and motorbikes.

Travel Insurance for American Express Platinum Card

Another extremely expensive credit card with a $695 annual charge (See rates & fees) that offers various types of travel insurance is the Platinum Card® from American Express.

For automobile rentals, the Amex Platinum offers CDW1, but it’s vital to note that Amex’s coverage is secondary rather than primary. This implies that your vehicle insurance will start paying out first, and then Amex will pay the remaining costs.

Travelers are covered with up to $500 per journey for unanticipated costs linked to delays of at least six hours for regular occurrences.² Additionally, it will pay up to $2,000 in compensation for missing checked bags and $3,000 in total for lost checked and carry-on luggage.³ Although you’ll get a little less coverage for a single lost bag, this coverage is mostly comparable to that of its rival, the Sapphire Reserve. Additionally, travel cancellation and interruption insurance is given, however the coverage maximums are only half as high as those of the Sapphire Preferred and Reserve cards ($10,000 per trip and $20,000 per year).

Even though we’re just talking about the Platinum card in this article, it’s important to be aware that other premium Amex cards also provide travel insurance. If you have a card like the Hilton Honors Aspire Card from American Express*, Marriott Bonvoy Brilliant® American Express® Card, or Delta SkyMiles® Reserve American Express Card, check your benefits handbook for further information. The amount of eligibility and benefits vary per card. Conditions, Restrictions, and Terms Apply. For further information, please visit New Hampshire Insurance Company, an AIG company, is in charge of underwriting. Rules Apply.

Individually Bought Travel Insurance Policies

How do paid plans vary from the included coverage offered with certain credit cards? The cost of an insurance ranges from 5% to 6% to almost 10% of the cost of your trip, depending on the traveler’s age, the location, the scope of the coverage, and the duration of the trip. Is the added expense justified?

Numerous alternative insurers will be available to you as you shop, some of which are dubious. You may get quotations from top-rated businesses at once with the aid of comparison websites like Forbes Advisor, but you should double-check the specifics of each policy to make sure you’re comparing like with like. You may get started by consulting our guide on purchasing travel insurance.

A comprehensive travel insurance plan’s key advantage over credit cards is that it is fully functional. American Express and Chase do not cover all potential incidents, but many premium plans do. You may upgrade to “cancel for any reason” insurance that will pay you for anticipated occurrences like Covid-19, or you can pick larger coverage limits.

Travel Insurance from Allianz

One of the top travel insurance providers in the globe is Allianz Global Assistance. They have a variety of policy options, but in this article we’ll focus on their middle-tier OneTrip Prime Plan. A figure for two visitors in their 40s who would spend two weeks in France and spend $8,000 on their vacation came in at $193 per person.

Travelers who purchase this policy are given a comprehensive package of coverage, including emergency evacuation, travel medical, trip cancellation, trip interruption, and delay. Increased medical coverage ($50,000 per person) and emergency transportation ($500,000) are the key improvements here.

On the OneTrip Prime and Premier plans, Allianz Travel Insurance provides a benefit that not all providers do: When traveling with their parents or grandparents, children under the age of 17 are protected without cost.

Travel insurance from Travelex

Another respected insurance provider that Berkshire Hathaway underwrites is Travelex. They provide several levels of coverage, with their TravelSelect plan being the most comparable to Allianz for comparison’s sake. The quoted price for the identical two-person trip to France was $231 per person, but it also contained somewhat greater coverage quantities. When traveling with an insured family member, Travelex, like Allianz, provides complimentary coverage for kids under the age of 17 years old.

The TravelSelect plan provides extensive coverage, including emergency evacuation, lost luggage, delayed baggage, trip cancellation and interruption, and trip delay. The Allianz plan caps this coverage at $100,000 and $150,000, respectively, whereas trip cancellation covers 100% of the insured trip cost and trip interruption covers 150% of the insured trip cost. Similar to Allianz, emergency transportation is covered up to a million dollars, and medical insurance is covered up to $50,000 per person.

To sum up:

Credit cards provide genuine, material benefits for travel insurance that can guard you against unforeseen costs. There isn’t a single credit card that offers comprehensive travel insurance, though. The Sapphire Reserve comes the closest, but many travelers may prefer a more comprehensive insurance because of its low maximum on medical payments.

If your regular health insurance will cover any potential medical costs while traveling, credit card insurance will frequently be sufficient for short vacations. If a traveler wants comprehensive medical and/or evacuation insurance, they will need to get a different policy or be ready to cover any potential costs out of cash.

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