Before we talk about credit card travel insurance, let’s run through the basics of standard credit card insurance, also known as balance protection. Most financial institutions offer this service, but many Canadians don’t understand their credit card insurance coverage or how it works.
Credit card insurance protects you in the event that you are unable to pay off your credit card debt. Failing to pay off your debt could be due to a variety of factors, including job loss, a sudden injury, or other unforeseen circumstances. Although insurance may not pay off your debt completely, it could help you pay it down to a more manageable sum.
Credit card insurance may offer purchase protection for lost, stolen, or damaged items bought with your card, as well as offer an extended warranty on purchased items. Credit card providers also offer numerous other insurance options. These include travel insurance, event ticket cancellations, mobile device protection, and more.
- How can I get credit card insurance?
- Credit card insurance limitations
- Credit card travel insurance
- Credit card travel insurance limitations
- Premium travel insurance credit cards
- No-fee travel insurance credit cards
- FAQ about credit card travel insurance
How can I get credit card insurance?
You may already have credit card insurance and not even know it. Some cards include balance protection insurance (or even travel insurance) as part of your regular credit card package. To find out if you have existing credit card insurance, review your credit card statement for any charges listed as optional products or premium charges. You can also search for a certificate of insurance that would have come with your card at the time of enrollment, or reach out to your financial institution directly.
Getting credit card insurance is a straightforward process. Just contact your credit card company and ask about your options. Most institutions have add-on options for balance protection, or they can change your account to a card that offers insurance.
Credit card insurance limitations
As with all insurance products, you should always read the fine print before signing an agreement. According to the Canadian government, “credit card balance insurance must be explained to you in a way that is clear, simple, and accurate.” Credit card insurance isn’t a fix-all solution, so you must understand its limitations and rules.
Most balance protections only cover up to a certain amount of credit card debt. Coverage varies, but if you become unemployed, injured, or disabled, you can expect to have 10% to 20% of your debt paid off for you. Your balance will usually be paid in full or up to the maximum allowable amount in cases of death or critical illness.
There are also limitations on the period in which credit forgiveness can occur. For example, your insurance will not cover purchases made after being diagnosed with a critical illness. The date of diagnosis, unemployment, or when an accident occurred is known as the “date of loss.” Any purchases made on your credit card after the date of loss will be up to you to pay off completely.
Pre-existing medical conditions may also result in limited credit card insurance coverage. Some providers will deny you insurance and others will limit your coverage. Be sure to read the terms of your agreement and speak with your credit card provider to learn all the terms of your insurance.
Credit card travel insurance
There are a million things that can go wrong on vacation. Cancelled flights, medical emergencies, accidents, lost baggage, stolen belongings, and rental car accidents, just to name a few. Credit card travel insurance can cover many of these worst-case scenarios and help you get back to enjoying your trip as soon as possible. Some insurance benefits only apply for travel expenses purchased through your credit card, so be sure to consider the policy guidelines when planning your trip.
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 insurance policy might be the better option for you. for your trip. 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.
Medical emergencies insurance
A medical emergency abroad can ruin your vacation and be a terrifying experience. Apart from focusing on recovery, you also need to worry about receiving treatment in a foreign country and how much the treatment will cost. Luckily, credit card travel insurance can alleviate some of this stress by covering the costs of any medical-related expenses during your trip. If you have a severe accident resulting in death or dismemberment, you or your family may receive a lump sum of money. Again, you need to read the fine print to learn what exactly your travel credit card will cover.
Flight delays and trip cancellation insurance
Those with credit card travel insurance may be able to avoid some of the chaos of a delayed flight thanks to travel credit card insurance. In the case of a delayed flight, some credit card travel insurance will cover your food, hotel, and other personal items while you wait out the delay. Coverage typically has a $500 limit, but may vary depending on the provider.
Sometimes, the unforeseeable happens, and you need to cancel your trip. In these cases, you could be reimbursed up to $1,500 for flights and hotel fees lost from the cancellation. Trip cancellation coverage is rare in a credit card travel insurance policy, but trip interruption coverage is more common. Trip interruption coverage will help you get home quickly and more affordably if you must cut your trip short.
Theft is a big worry while you are on vacation. From pickpockets to baggage carriage thieves to hotel robbery, getting stranded in a new place without your belongings is a bad situation. Credit card travel insurance often covers baggage stolen in transit for up to $500. If your bags aren’t lost but are simply delayed, you could also be covered to purchase some essentials while you wait for your bags to arrive. Given the $500 limit, those travelling with expensive items may want to purchase a separate travel insurance policy.
Rental car insurance
It can be fun to rent a car and try out a new set of wheels, but you always feel relieved when you drop the rental car off in one piece with no extra charges. To help give you even more peace of mind on the road, some credit card travel insurance plans come with rental car insurance. This type of coverage varies, but often covers theft and damage to the rental car. Purchasing credit card travel insurance means you can also opt out of the insurance the rental car company will try to charge you per day.
Credit card travel insurance may also cover personal items stolen from a rental car. This coverage is very similar to the theft and loss of baggage coverage. Some companies only cover theft that occurs while you are present, while others will cover theft even if you aren’t in the rental car.
Premium travel insurance credit cards
This list of cards focuses on luxury options, which typically have more robust insurance coverage than no-fee credit cards that offer travel insurance. The most important factor to remember is whether your overall coverage will be worth the fee. Some cards can have annual fees as high as $399. Before paying so much for a credit card fee, you should compare traditional travel insurance policies and consider purchasing a more robust coverage plan.
These examples are only a small sample of the many travel cards available. Everyone has a different opinion on the best travel credit cards on the market, but be aware not all cards will come with travel insurance. Comparing credit cards to understand your choices could save you money.
BMO Ascend World Elite Mastercard
Annual Fee: $160
Eligibility: $80,000 per year individual income, or $150,000 per year combined income
Interest Rate: 20.9%
This credit card offers travel insurance for almost every travel mishap imaginable. Trip cancellation and delay benefits are included with reimbursement of up to $2,500, available for pre-paid portions of your trip. There are strict guidelines as to what constitutes a reason to cancel or delay your trip, so be sure to learn what exclusions exist for your policy. Flight delay benefits are also available for flights that are delayed by more than 6 hours. In this case, you can receive up to $500 to cover emergency lodging and other unexpected expenses.
Medical benefits are limited to those under 65 and include up to $2,000,000 of coverage for medical care, including private nursing, air evacuation, and more.
Rental car insurance is covered for 48 consecutive days and includes up to $65,000 of the rental car value in the case of damage or loss of the vehicle. Be sure to confirm the types of cars eligible for coverage, as some models are excluded. For severe car accidents while driving a rental vehicle, death and dismemberment benefits go up to $200,000.
Theft of personal belongings from a rental car is also covered through this credit card travel insurance. You must provide proof that physical force was used to open the vehicle for your claim to be approved. Personal effects coverage is based on the value of your items and is limited to $1,000 for each person on your credit card per trip.
American Express Aeroplan Reserve Card
- Annual fee: $599
- Interest rate on purchases: 20.99%
- Interest rate on cash advances: 21.99%
The American Express Aeroplan Reserve Card is one of the best travel insurance credit cards on the market, and with an annual fee of $599, it’s no wonder the insurance plan is so extensive. This credit card includes every travel insurance benefit thought possible, including insurance for medical emergencies, trip cancellation, baggage loss, flight delays, hotel burglary, car rentals, and more. Most of the coverage maximums for your benefits are also much higher than other cards.
Medical insurance coverage is up to a whopping $5,000,000 for those under 65, although the coverage period is only 15 days. If your flight is delayed by more than 4 hours, or if your baggage is delayed, you will also be eligible to receive $1,000 per incident to cover necessary expenses. American Express will cover up to $1,000 in benefits if your personal belongings are stolen from your hotel. The Aeroplan Reserve Card’s rental car insurance coverage is also more extensive than other options. Vehicles up to $85,000 in value are covered for a rental period of 48 days. Many insurance policies won’t cover rental cars worth more than $65,000, so the extra coverage is perfect if you rent a more expensive vehicle.
No-fee travel insurance credit cards
Many people want to avoid paying an annual fee on their credit cards. This goal can be hard to accomplish, especially when you also want perks like travel insurance. Luckily, there are a few options for no-fee credit cards with travel insurance.
President’s Choice Financial World Elite Mastercard
Annual Fee: $0
Eligibility: $80,000 per year individual income, or $150,000 per year combined income
Interest Rate: 20.97%
The President’s Choice Financial World Elite Mastercard has a variety of benefits with no annual fee. The travel insurance coverage under this card is aimed at those under 65. The policy covers the first ten days of your trip and an array of medical services up to $1,000,000. The list of services covered is long, but includes ambulance services, doctor charges, prescription drugs, return airfare, and more. The PC Financial website only lists benefits for out-of-province services, so you will want to confirm whether this coverage extends to out-of-country trips.
This card also offers rental car insurance options for those interested in road trips. President’s Choice Financial offers collision and loss damage on rental cars for 31 consecutive days. This coverage enables you to opt out of the insurance coverage through the rental care company.
Rogers World Elite Mastercard
Annual Fee: $0
Eligibility: $80,000 per year individual income, or $150,000 per year combined income
Interest Rate: 19.99%
The Rogers World Elite Mastercard is another excellent choice for world adventurers looking to save on a credit card annual fee. The insurance benefits on this card include something for everyone, including trip cancellation or delay coverage, which will reimburse you up to $1,000 per trip. Up to five other people on your credit card account are also eligible to receive the $1,000 coverage.
Rogers also has emergency medical coverage available for both out-of-province and out-of-country travel. Coverage is dependent on your age. Those in the 65-75 age group are covered for three days during a trip. Those younger than 65 have coverage for up to 10 days. Financial coverage is standard, offering up to $1,000,000 per person, per trip. The policy covers extensive medical services, including emergency transportation, additional hotel and meal expenses, and the return of your vehicle if necessary.
The Rogers World Elite Mastercard also boasts some good car rental insurance coverage. Rental cars are covered up to 31 days and include damage, theft of the vehicle (and any parts), and towing. Coverage is about $65,000, but be sure not to violate any of the insurance agreements listed in your contract to ensure you don’t lose out if an accident occurs.
FAQ 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.
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.
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.
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 and Airmiles partnered 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.
About The Author: Arthur Dubois
Passionate about personal finance and financial technology, Arthur Dubois is a writer and SEO specialist at Hardbacon. Since his arrival in Canada, he’s built his credit score from nothing.
Arthur invests in the stock market but doesn’t pay any fees because he uses National Bank Direct Brokerage online broker and Wealthsimple’s robo-advisor. He pays for his subscriptions online with his KOHO prepaid card, and uses his Tangerine credit card for most of his in-store purchases. When he buys bitcoins, it’s with the BitBuy online platform. Of course it goes without saying that he uses the Hardbacon app so that he can manage all of his finances from one convenient place.
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