How does travel insurance on credit cards work in Canada?
By Daniel Schoester | Published on 03 May 2023
Table of Contents
Travel insurance on credit cards is a type of insurance that provides coverage for expenses related to travel-related losses. It can include coverage for medical expenses, trip cancellations, lost luggage, and more. Credit card travel insurance is essential because it gives you peace of mind knowing you’re protected abroad.
It can provide financial protection in an emergency, such as an illness or injury during your travels. It’s important to know what kind of coverage your credit card offers before you leave on a trip and understand how to claim if necessary. If you’re a Canadian and a credit card holder, you may wonder how travel insurance works on your credit card and what travel insurance options are available. In this article, we’ll look at everything you need to know about travel insurance on credit cards in Canada.
What Is Credit Card Travel Insurance?
Credit card companies offer travel insurance as an additional benefit. Other benefits include lounge access, no foreign exchange fees, travel points, and more. In particular, credit card travel insurance provides coverage for expenses related to travel-related losses. Each provider has different coverage specifics. However, the insurance can include medical fees, trip cancellations, lost luggage and more.
You can get travel insurance by using your credit card. When you use your credit card to buy a ticket for a trip, the insurance will be activated automatically. This will help cover the cost if something unexpected happens, like an illness or natural disaster, and you must cancel or postpone your trip. However, you must generally make purchases on your card to receive coverage.
Additionally, each credit card has different insurance types, which we’ll discuss in more detail later in this article. It’s essential to read through the terms and conditions of any policy carefully, as there may be different limits or exclusions that apply depending on the provider. When claiming your credit card travel insurance, you must usually provide proof of the loss, such as receipts, medical bills or police reports. It’s essential to keep all relevant documents and paperwork related to your claim to ensure that it is processed quickly by the insurance company.
Travel Credit Card Insurance vs. Regular Travel Insurance
Regular travel insurance policies provide more comprehensive coverage and often include 24/7 emergency assistance, making them a better option for many travellers. They are generally more focused on the healthcare side of travelling. For example, they may have additional inclusions, such as emergency evacuations and higher coverage limits.
On the other hand, travel credit card insurance often provides lifestyle insurance that isn’t available with regular travel insurance. For example, you’ll commonly receive lost luggage protection and delayed trip coverage. However, always review the types of insurance each policy covers to understand the gaps in your coverage.
Regular Travel Insurance
Standard travel insurance policies provide more comprehensive healthcare coverage. This can be especially important if you’re travelling to a foreign country where you’re not familiar with the local healthcare system. Standard travel insurance companies like Blue Cross generally offer higher limits and longer coverage durations. However, you’ll usually need to purchase this insurance before your trip.
Travel Credit Card Insurance
The insurance is an add-on benefit to your travel credit card. It’s less specialized but often provides a broad range of coverage. Most policies will cover lost luggage, travel delays and medical expenses. However, coverage limits are often significantly lower than regular travel insurance. You will only also typically have a few days of coverage.
The critical benefit of credit card travel insurance is that it’s included with your card and doesn’t require additional purchases. When you use your credit card to pay for tickets or other items related to a trip, the coverage will be activated automatically. Remember that the coverage limits and exclusions can vary depending on the credit card, so read through the policy carefully before choosing a card.
Credit card travel insurance limitations
Before we dive into what credit card travel insurance covers, it is also essential to understand what it does not cover.
For those who do not travel frequently, a credit card with travel insurance may not be helpful to you. Instead of paying the extra premiums that may come with travel credit cards, an individual travel insurance policy might be the better option for you. Insurance policies might also be the way to go if you travel as a large family, as most travel insurance credit cards don’t cover dependents.
For those who travel frequently, travel credit cards may have some limitations but is often worth the additional costs. Buying multiple travel insurance policies can be costly and confusing, so having blanket coverage through your credit card can be beneficial. Many travel credit cards also come with big travel bonuses like discounts on hotels, reward points for flights, and access to airport lounges. Travel insurance mixed with these add-ons could be very enticing for frequent travellers.
Many cards have specific limitations on coverage based on the location, length, and purpose of your trip. Typical credit card travel insurance will only cover trips of up to 21 days and has limits on the amount of coverage you can receive. Many cards offer around $2,000,000 in medical expenses. $2,000,000 may sound like a lot, but depending on your trip and the location you are travelling to, that money can get used pretty quickly. For example, going to the clinic for a stomach ache on your beach trip to Cuba costs much less than an emergency helicopter evacuation out of the Amazon rainforest after a rock-climbing fall. Getting additional travel insurance coverage for adventurous trips may be worth the investment to protect against in a worst-case scenario.
Age and pre-existing medical conditions will also affect your credit card travel insurance coverage. Most cards drastically lower the amount of coverage available once you turn 65. In your senior years, you may only be entitled to four days of coverage instead of two weeks or more, which a younger customer may receive. Some travel credit cards cater to older travellers, but you should read the fine print to ensure you have the necessary coverage. Having a pre-existing medical condition will also reduce your coverage options and could necessitate getting a separate travel insurance policy.
The Types of Travel Insurance on Credit Cards
With so many names, it’s challenging to determine the coverage you have. This section aims to help you understand what each type of insurance covers. However, note that each card may only offer a few types. As a result, it’s essential to understand which options will be helpful for you. We have also provided a suggested card that includes the appropriate coverage.
| Insurance Name | Description | Suggested Card |
|---|---|---|
| Emergency medical | Covers you if you get sick or injured while travelling outside your home province. | Scotiabank Gold American Express |
| Travel accident | Provides coverage for accidental death or dismemberment while travelling. | Scotiabank Gold American Express |
| Flight delay | Covers you if your flight is delayed or cancelled. | American Express Aeroplan Reserve |
| Trip cancellation & interruption | Protects you if you must cancel or interrupt your trip due to unforeseen circumstances. | Scotiabank Gold American Express |
| Baggage delay or loss | Covers you if your baggage is lost, damaged, or stolen while travelling. | Scotiabank Gold American Express |
| Hotel burglary | Covers the theft of your belongings from a hotel or motel room. | American Express Cobalt |
| Rental car | A category of coverages that protects you when driving a rental car. | BMO Ascend World Elite Mastercard |
| Mobile device | Covers you if your mobile phone is stolen, lost, or damaged. | Tangerine World Mastercard |
| Event ticket cancellation | Covers you from event cancellation due to unforeseen circumstances | Brim Financial Mastercard |
| Price protection | Receive a refund if an item you bought with that card drops in price within a certain period. | MBNA Rewards World Elite Mastercard |
| Purchase protection | Covers eligible purchases made with your credit card against theft, loss, or damage for a specified period. | MBNA Rewards Platinum Plus |
| Extended warranty | Offers additional coverage beyond the manufacturer’s original warranty. | MBNA Rewards Platinum Plus |
Health Related
Your health is your wealth, as they say. Some of the most sought-after credit card insurance protection involves healthcare. Most commonly, this included emergency medical and travel accident insurance. While these policies are a great start, they often provide less protection than traditional travel insurance.
Medical Emergency Insurance
This insurance covers you if you get sick or injured while travelling outside your home province. It may cover hospitalization, ambulance services, prescription drugs, and emergency dental treatment. It is important to note that the insurance may not cover you for pre-existing medical conditions. An important point is that only some cards will protect you over 65. While there are cards offering coverage to this demographic, they are less available.
Suggested Card: Scotiabank Gold American Express Card
Travel accident insurance
Travel accident insurance is a type of travel insurance that provides coverage for accidental death or dismemberment while travelling. If this happens, your insurance will send your family a lump sum payment up to the coverage limit. This coverage usually supplements other insurance, such as health care.
Suggested Card: Scotiabank Gold American Express Card
Travel Related
Travel credit card insurance can step up with their lifestyle insurance benefits. This can include compensation for delayed flights and lost luggage. However, you’ll likely need to have purchased the relevant item with your card to receive the coverage.
Flight delays insurance
This insurance covers you if your flight is delayed or cancelled due to bad weather, a mechanical issue, or any other covered event. It typically provides coverage for reasonable expenses, such as meals and hotels, while you are waiting for the next available flight. Coverage typically has a $500 limit, but may vary depending on the provider.
Suggested Card: American Express Aeroplan Reserve Card
Trip cancellation and interruption insurance
This type of insurance covers you if you have to cancel or interrupt your trip due to unforeseen circumstances such as illness, injury, or death of yourself or a family member. It may also cover you if your travel provider goes bankrupt or if there is a natural disaster at your destination. Note that the approved cancellation reasons vary with policies.
Suggested Card: Scotiabank Gold American Express Card
Baggage delay or loss insurance
This insurance covers you if your baggage is lost, damaged, or stolen while travelling. It typically covers reasonable expenses, such as replacement clothing and toiletries, while waiting for the delayed bag to arrive. If your bag is lost, the insurance company will likely refund the value of your items. However, note that these are two separate coverages, so your card may include only one.
Suggested Card: Scotiabank Gold American Express Card
Hotel burglary insurance
This insurance covers the theft of your belongings from a hotel or motel room. This includes items stolen from your room while you are away and any thefts during the stay.
Suggested Card: American Express Cobalt Card
Rental car insurance
Often the rental car agency will attempt to upsell you with various coverages. Having a proper credit card lets you save money while ensuring protection. There are many types of rental car insurance, and most cards will only cover some of them. Additionally, you’ll need to use your card to purchase the rental car for coverage. This section will walk you through the various options.
- Rental car accident: This covers the cost of repair or replacement of the rental vehicle in case of an accident. However, it generally won’t cover your healthcare expenses if you are injured.
- Rental car theft & damage: This covers the cost of repair or replacement of the rental vehicle in case it is stolen or damaged.
- Rental car personal effects: This covers your items if a thief steals them from the rental vehicle.
Suggested Card: BMO Ascend World Elite Mastercard
Non-Travel Related
Non-travel-related benefits can include price protection insurance, purchase protection insurance, extended warranty insurance, mobile device insurance, and event ticket cancellation insurance. While offered by many types of credit cards, they are additional benefits to be aware of. In particular, mobile devices and event cancellation are scarce benefits in Canada.
Mobile device insurance
This insurance covers you if your mobile phone is stolen, lost, or damaged. It typically covers reasonable expenses such as repair costs or a replacement device. However, it’s important to note that you’ll normally have to buy the phone in full with your designated credit card to receive coverage.
Suggested Card: Tangerine World Mastercard
Event ticket cancellation insurance
This insurance covers you from event cancellation due to unforeseen circumstances such as a natural disaster or illness. Depending on the card, it may also cover postponed or relocated events. It typically covers the cost of tickets purchased with your designated credit card.
Suggested Card: Brim Financial Mastercard
Price protection insurance
Price protection is a feature offered by some credit cards. It allows you to receive a refund if an item you bought with that card drops in price within a certain period. Depending on the card, the period can vary from 30 to 120 days. The lower-priced item must match the item you bought precisely. Price protection is not automatic; you must file a claim for a refund.
Suggested Card: MBNA Rewards World Elite Mastercard
Purchase protection insurance
This type of insurance covers eligible purchases made with your credit card against theft, loss, or damage for a specified period after the purchase date. Depending on the card, the period can vary from 30 to 90 days. This insurance does not cover purchases lost due to normal wear and tear or damage caused by improper use.
Suggested Card: MBNA Rewards Platinum Plus
Extended warranty insurance
This type of insurance offers additional coverage beyond the manufacturer’s original warranty for eligible purchases made with your credit card. For example, suppose you purchase a laptop with a manufacturer’s warranty of one year. If your credit card offers extended warranty coverage, you can receive additional coverage beyond the original one-year period.
Suggested Card: MBNA Rewards Platinum Plus
Additional Considerations
There are several factors to consider when analyzing your credit card insurance. In addition to types of coverage, you should consider the coverage amount, length, customer service, and limitations. These factors can help you truly understand what your card offers.
Coverage Amount
It’s crucial to check the coverage amount offered by the policy. While your insurance may cover many events, the amount may be limited. Medical emergencies can be expensive, especially if you’re travelling to a country where healthcare is costly. If your card only offers a few thousand in coverage, you’ll likely be stuck with a hefty bill. Ensure that each covered event offers sufficient financial protection.
Coverage Length
The duration of coverage is another essential factor to consider. Your card could provide excellent protection, but only for a few days. Ensure your credit card insurance will protect you throughout the entire duration of your trip.
Customer Service
Another thing to consider is the policy’s customer service and claims process. Look for policies that offer 24/7 customer support and have a straightforward claims process. This will ensure that you can get help when you need it the most.
In addition, some policies require you to visit an affiliated doctor. This can become a challenge if you’re travelling to a remote destination or an unfamiliar region. Review your policy to determine if you can select your doctor.
Limitations and Exclusions
It’s essential to read the policy’s fine print and check any limitations or exclusions that it might have. For example, some policies might not cover adventure sports or pre-existing medical conditions. The remainder of this section will discuss some instances to be aware of.
- Card usage: In most cases, your credit card will only protect you if used to purchase the relevant item. For example, The insurance may only cover your luggage if you booked the flight with a specific card. Other cards may provide complete coverage if only a portion of the trip was booked with your card.
- Pre-existing medical conditions: One of the most common exclusions in travel insurance policies is pre-existing medical conditions. If you have a medical condition that existed before you purchased your policy, you may not be covered if that condition causes you to cancel or interrupt your trip.
- High-risk activities: Another common exclusion is injuries caused by high-risk activities. If you plan on participating in activities such as bungee jumping or skydiving, you may not be covered if you’re injured.
- High-probability natural disasters: Your policy may not cover certain natural disasters. For example, if you’re travelling to an area known for hurricanes or earthquakes, you may need additional coverage to ensure you’re protected.
Step-By-Step Guide to Making a Claim With Your Travel Credit Card
In case of emergencies or trip cancellations, knowing how to make a travel insurance claim and the essential steps is essential. Failing to follow the proper steps can void your insurance coverage. As such, this section will walk you through the process.
- Notify your insurance provider as soon as possible after the incident occurs. Provide as much information as possible, including your name, policy number, and details about the incident.
- Know the emergency number of the country you’re travelling to. For example, in the United Kingdom, the emergency number is 999, while in the United States, it’s 911.
- Keep a copy of your travel insurance policy with you at all times to quickly and easily access your policy number and other essential details.
- Gather and provide any documentation the insurance provider may need to process your claims, such as medical records or police reports. Keep all receipts and invoices related to the incident, as these may also be required.
- If your insurance provider requires you to pay for medical treatment upfront and claim the costs back later, keep all receipts and documentation related to the treatment, as these will be needed when making your claim.
- Allow the insurance provider time to process your claim. While turnaround times vary between providers, most will aim to process claims as quickly as possible. Keep in touch with your insurance provider throughout the process and provide any additional information or documentation they may require.
Travel Insurance on Credit Cards: The Bottom Line
Travelling can be an enriching experience, but it’s also essential to understand the risks involved and how travel insurance works on your credit card. While travel credit card insurance is a great perk, it may not provide as comprehensive coverage as a standard travel insurance policy.
When comparing policies, always consider the coverage amount, duration of coverage, and any limitations or exclusions the policy might have. Remember to read the fine print with any policy, and ensure you know how to claim if needed. With these tips, you can travel with peace of mind, knowing you’re protected abroad.
FAQs About Credit Card Travel Insurance
Most credit cards that include travel insurance are cards with a specific travel theme. They will often have travel in the name of the card and include perks like hotel discounts, flight reward points and more. That said, your regular credit card may also come with travel insurance. Ask your financial institution for more information about your insurance options.
Which credit cards offer travel insurance?
There are many options for credit cards with travel insurance, ranging from cards with no annual fee and minimal coverage to cards with high annual fees and extensive coverage. Most credit cards that offer travel insurance benefits will be travel credit cards. With a travel credit card, you get the bonus of travel perks like airport lounge access, reward points, and travel insurance coverage.
Redeeming your credit card travel insurance is similar to any other insurance policy. It is essential to notify your provider of any incidents as soon as possible and keep documentation on hand that you can use to support your claim. Your credit card should come with an insurance card that gives you all the details on submitting an insurance claim, including contact information for the insurance department.
Credit card travel insurance could be enough for your travel plans, depending on your situation. For many people, your credit card travel insurance will provide adequate protection in the case of an emergency, but everyone’s situation is different. If you are going on a particularly long or adventurous vacation, have pre-existing health conditions, or are over 65, you may want to get a separate insurance policy. It is always a good idea to review the terms of your credit card insurance agreement to understand your coverage and make the right decision for your situation.
Most American Express credit cards do include various forms of travel insurance. American Express has several different credit cards geared to travel enthusiasts, including Aeroplan credit cards. The American Express Aeroplan Reserve Card card has the most extensive travel insurance coverage, but other American Express cards also have travel insurance options. Check your card details to verify your travel insurance eligibility and your coverage limitations.
The CIBC Costco Mastercard in Canada does not include travel insurance. This credit card does come with purchase security, extended warranty protections, and mobile device insurance.
