Kiplinger’s Personal Finance: Credit Cards Offer Travel Insurance

Just when many people thought the pandemic was over, the COVID-19 delta variant has threatened fall and winter travel plans. But if you booked a trip with a credit card that offers travel insurance, you may be able to recoup some of your costs.

For example, your card may provide some coverage if your trip is canceled or disrupted, and it may cover the cost of delayed or lost luggage.

In general, premium rewards cards - which typically charge an annual fee - provide better coverage.

Protections usually kick in when events that affect your trip are out of your control, said Nick Ewen, travel rewards expert at The Points Guy, a consumer travel website.

For example, suppose a flight delay caused you to miss a night in a hotel room that you reserved with an advance, nonrefundable payment. If you paid for the room with a credit card that includes travel insurance, the card would more than likely cover your loss. But if you decided you no longer wanted to go on the trip - perhaps because of concerns about COVID-19 - your card's travel insurance probably wouldn't cover your losses.

All cards are not created equal.

The Chase Sapphire Reserve card (annual fee $550) offers cancellation/interruption coverage of up to $10,000 per person, for example, while the American Express Platinum card (annual fee $695 for new cardholders) provides up to $10,000 per trip.

Most travel insurance offered by credit cards is secondary to any coverage the airline or hotel provides. For example, if an airline pays you $2,000 to cover the cost of lost luggage and your credit card's lost luggage coverage is limited to $2,000, your claim will be denied. If your card's lost luggage coverage exceeds that amount, you may receive the difference between $2,000 and the card's coverage limit.

If you're unsure of what kind of travel insurance your card provides, log on to your credit card account and read the benefits guide. The guide usually provides a toll-free number you can call if you have additional questions.

Or, if you find that your card doesn't offer travel insurance or it has few benefits, consider shopping for one with better rewards. Check out Kiplinger's list of top rewards cards at kiplinger.com/kpf/cards21.

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