Is Travel Insurance Worth Getting?

While travel can be a life-changing experience, having something go wrong on your trip can be a stressful and dizzying experience. Lost luggage, canceled flights, injuries and other travel mishaps can leave you paying out-of-pocket for unexpected expenses, missing all or part of your trip or both. One way to soften the blow of travel disasters — at least financially — is to have travel insurance.

But, where you get your travel insurance matters quite a bit. You can purchase a travel insurance plan through a major insurance provider, but you can also benefit from coverage that comes automatically with a travel credit card.

What is credit card travel insurance?

In general, travel insurance helps provide financial compensation for mishaps like lost or stolen luggage or if you need to cancel a trip for reasons that are beyond your control. In the event of a qualifying incident, you can file a claim with the insurance company to get money back for certain expenses, up to a previously agreed-upon limit. These policy limits can vary widely. For example, you’ll find travel insurance policies that offer anywhere from $25,000 to $500,000 in coverage for medical emergencies and nearly any amount in between.

Credit card travel insurance is exactly what it sounds like — complimentary travel insurance benefits that come with certain eligible credit cards.

While it isn’t the most robust coverage, this protection can help out with various travel-related emergencies and inconveniences. When cardholders use their credit cards to book travel arrangements such as flights, hotels or rental cars, they may automatically become eligible for these insurance benefits. The key element here is to book at least your flights or other transportation using the credit card, or else you won’t qualify for the coverage.

Most credit card travel insurance policies include coverage for trip cancellations, trip interruptions and delays and lost or delayed baggage. Some cards may also provide coverage for emergency medical expenses, emergency evacuation and rental car insurance. However, credit card coverage for emergency medical expenses tends to be insufficient. For this reason, travel coverage offered through credit cards is typically best for domestic travel where your own health insurance coverage would apply if you become sick or injured during your trip.

What does travel insurance cover?

To make it easier to understand what travel insurance covers, we’ve broken down the most common types of coverage:

Coverage for canceled, interrupted or delayed trips

• Trip cancellation and interruption insurance
  

  If you need to cancel your trip, trip cancellation and interruption coverage can reimburse you for eligible prepaid travel expenses like transportation, hotels and tours. Qualifying reasons for cancellation or interruption include events like the death of a family member, terrorism, natural disasters and unforeseen illnesses or injuries. In some cases, events like jury duty or being laid off from your job qualify.

• Trip delay reimbursement
  

  Most travel insurance policies require travel delays to last six to 12 hours (but this varies by each policy) for trip delay coverage to kick in. When in play, this benefit typically offers $150 to $200 per day for a certain number of days to cover necessary expenses like unexpected hotel stays and meals.

• When you might need this coverage
  

  Getting stranded far from home and having to pay for extra nights in a hotel you didn’t budget for, having to change flights at the last minute or canceling some or all of a nonrefundable trip before you even hit the road can all cost a pretty penny. If you’re traveling somewhere prone to major weather incidents and have multiple flights (increasing the possibility of missed connections), this is an important type of insurance to have.

Coverage for emergency medical situations

• Emergency medical coverage
  

  Emergency medical benefits can come in handy if you’re injured or become ill while traveling and require hospitalization, medication or treatment. This type of coverage becomes necessary if you’re traveling internationally or on a cruise where you may not have access to medical care covered by your health insurance plan. Even with coverage, you typically need to pay for your medical care out of pocket and file a claim later for reimbursement.

• Emergency medical evacuation
  

  If you have a medical emergency while traveling that requires transportation to the nearest medical facility, medical evacuation coverage can help with those costs. This is often add-on coverage for travel medical insurance, but it can come in handy if your treating physician recommends you go home to receive medical treatment or if a death occurs and there are costs associated with transporting the traveler’s remains.

• When you might need this coverage
  

  Are you traveling out of network? How about out of the country or to a remote locale where it’s difficult to access medical care? If you need medical attention when you’re traveling and your health insurance won’t cover your costs, having travel insurance that pays for medical emergencies and medical transportation can save you a lot of money.

Coverage for lost, damaged or delayed baggage

• Lost or damaged baggage protection
  

  Lost or damaged baggage protection can help replace your luggage and belongings in certain situations. Some policies only reimburse for luggage that is lost or damaged when it is checked with a common carrier. However, some policies also cover hand luggage that is lost or damaged during transit.

  If you’ll be carrying more expensive items, you may want to pursue a third-party plan that will reimburse more expensive items, such as a camera or computer. You may also need to file a police report within a certain timeframe to receive coverage.

• Baggage delay protection
  

  Even if your belongings eventually arrive in one piece, baggage delay protection can reimburse you for any costs you incur while waiting to be reunited with your bags. For example, a baggage delay can leave you having to pay out-of-pocket for charging cords, toiletries or clothing while you wait.

  You may face a daily limit on how much you can purchase to replace your delayed goods, along with a limit on what you can purchase. Additionally, these benefits don’t typically kick in unless your luggage is delayed for a specified period of time (usually six to 24 hours).

• When you might need this coverage
  

  If you’re checking a bag while flying, you may want coverage for lost, damaged or delayed baggage. This coverage can help you pay for clothing, toiletries and any other items you need to replace if your luggage goes missing or is harmed, especially if it gets lost by the time you arrive at your destination.

Coverage for rental cars

• Rental car insurance
  

  Many credit cards offer rental car coverage for collisions, loss and damage. It’s usually secondary coverage, meaning it kicks in after your primary auto insurance, and coverage typically excludes liability for damage to other property or for injuries to others.

  However, some credit cards offer primary auto rental coverage, which works in place of your own insurance and provides reimbursement up to a certain amount for theft and collision damage. Note that you’ll typically need to decline the car rental company’s insurance in order to receive coverage through your credit card.

• When you might need this coverage
  

  For domestic travel, your existing auto insurance policy may cover any issues with rental cars, and it’ll likely kick in before an additional collision policy anyway. Check out what your insurer covers first before getting an additional policy.

  It’s also worth noting that your credit card rental car insurance may apply overseas. However, not all countries and destinations are covered in every policy, so you’ll want to read over coverage you’re offered to confirm before you rely on this coverage.

How to use credit card travel insurance

If a trip is partially or fully booked on your credit card, you may be able to access travel insurance benefits that come with your credit card. Here’s how to use your credit card travel insurance:

• Confirm your coverage. Before you file a claim, it’s helpful to brush up on your coverage. Your card should come with a benefits guide that outlines what type of travel coverage you have, including the maximum amount they’ll cover, exceptions to your coverage and how long you have to submit a claim (typically less than 60 days).
• Show receipts and necessary documentation. You’ll likely need to provide receipts when you file your claim if you want to get your money back. You might also need to provide key documentation such as showing how a loss occurred, correspondence with travel providers proving they won’t reimburse you, doctors’ notes, police reports or any other applicable paperwork.
• File the claim. Report any losses or situations to the benefits administrator within your policy’s claim timeframe. Generally, you’ll download a claim form from the credit card provider’s website and submit evidence of the losses or situations for which you’re seeking reimbursement.
• Wait for a decision. Your credit card provider will contact you with a decision regarding your claim and, if approved, explain how it plans to distribute your funds.

When is travel insurance worth it?

Where or not you should purchase travel insurance in addition to the benefits your credit card offers depends on how much coverage you already have and what your risk tolerance is. Some premium credit cards offer robust travel coverage — such as emergency evacuation coverage, lost baggage coverage or trip cancellation and interruption insurance — whereas no-annual-fee credit cards typically offer basic coverage like roadside assistance.

Note that travel insurance policies tend to get more expensive as you age. Ultimately, this means the flat annual fees you’ll pay for premium travel credit cards such as The Platinum Card® from American Express ($695 annual fee) and the Chase Sapphire Reserve® ($795 annual fee) make their travel coverage more valuable the older you get.

Consider what type of travel insurance you may need and the events and belongings you need to have insured. If you want basic coverage for smaller issues, such as covering costs incurred if your flight is delayed, it’s highly possible your credit card policy may be enough. If you have ambitious travel plans that involve bigger risks — like booking a nonrefundable international trip — you’ll likely want to purchase a travel insurance policy that offers more robust coverage that can help protect your financial investment.

When is travel insurance not worth it?

Depending on where you’re traveling and the type of trip you’re taking, travel insurance might not be necessary. For example, if your trip is completely refundable, trip interruption and cancellation insurance are likely not necessary. You may also not need any type of travel insurance if you’re taking a cheap trip close to home that doesn’t require flying.

Additionally, if you’re traveling within the U.S., you likely won’t need additional medical coverage beyond your existing health insurance plan (though it would be good to check your policy first). If you’re traveling outside of the U.S., however, additional medical coverage — whether purchased or provided through a credit card — can be helpful in an emergency situation.

Should you get a top credit card for travel insurance?

Many travel credit cards can provide you with enough travel insurance benefits to protect you in an emergency or if your plans change. If you have one of these cards and use it to pay for an upcoming trip, this means you may not need to purchase a separate travel insurance plan at all. Of course, this depends on the type of trip you’re taking, among other factors.

If you’re looking for a new credit card and want one that provides solid travel insurance coverage, here are some of the best cards for travel insurance to consider and a rundown of the coverages each one offers.

Although travel insurance can be a great cardholder perk, it may not be the main factor to consider when picking out a new credit card. Other benefits that may be more important to you include a great rewards program, a sign-up bonus or intro APR offers. In summary, a card that rewards you for your regular spending may be more valuable in the long run than one that comes with a limited amount of travel insurance to cover the occasional trip.

While you can’t predict the exact cost of every future trip you plan, you probably have an idea of the kind of trips you take and the potential coverage they require. For example, if you love taking road trips in your trusty SUV and rarely rent a car or book a flight for a vacation, then you’re less likely to need car rental or baggage delay coverage. But having roadside assistance as a perk may give you much-needed peace of mind when you hit the open road. Look for a credit card that offers coverage in line with the way you travel most often.

The bottom line

Credit card travel insurance benefits can offer travelers solutions to frustrating and costly travel problems. Because you don’t need to pay for this cardholder perk, it’s a great bit of extra protection to have in your back pocket.

However, there are some situations where relying on credit card travel insurance won’t make sense. If you’re spending a lot on an upcoming trip overseas, you’re worried about travel issues that may require expensive solutions or both, purchasing a separate travel insurance policy may be the best move.

Frequently asked questions about travel insurance

• How much does travel insurance cost?
  

  Travel insurance costs vary depending on the type of plan you select: Basic, middle tier or comprehensive. They can also depend on factors like your trip’s total cost, how long you’re traveling for, where you’re traveling, how many people require coverage and travelers’ ages.

• What is excluded from travel insurance?
  

  Consumers typically run into two primary problems with travel insurance:

  1. Not having enough coverage
  2. Not qualifying for the coverage they do have

  When dealing with travel insurance that you gain access to as a cardholder perk, you’ll want to read through your policy before booking your trip to ensure you know exactly what you have coverage for and whether you need any extra coverage. Take note of what your coverage limits are.

  For example, your credit card travel insurance may cover medical treatment, but there may be a limit as to how much they’re willing to cover. The type of vacation you take can also impact your insurance. Most basic travel insurance does not cover activities that can be viewed as dangerous, like skydiving or rock climbing, or it will contain exclusions for travel to specific areas, like those prone to extreme weather events or with current travel warnings.

  As for car rental insurance, your credit card coverage may not be applicable in certain countries, or it may not cover certain situations. Credit card car rental coverage is also usually secondary coverage, which means your credit card company only pays what your primary car insurance policy won’t cover.

• Should I book all my trips on a credit card?
  

  In most cases, you’ll need to pay for the common carrier fare on the plane, train, bus or cruise ship you plan on traveling with in order to gain access to your travel insurance offerings. Note that some credit card providers may require you to book the entirety of your trip on their card, whereas others simply need you to book the main transportation to your destination in order to qualify. Because these requirements can vary so much, it’s important to confirm how to qualify for your insurance benefits before you book your trip.

For Capital One products listed on this page, some of the above benefits are provided by Visa® or Mastercard® and may vary by product. See the respective Guide to Benefits for details, as terms and exclusions apply.

*Eligibility and Benefit level varies by Card. Terms, Conditions and Limitations Apply. Please visit americanexpress.com/benefitsguide for more details. Underwritten by New Hampshire Insurance Company, an AIG Company.

**Underwritten by AMEX Assurance Company. Car Rental Loss or Damage Coverage is offered through American Express Travel Related Services Company, Inc.