Why I Buy Travel Insurance, Even Though My Credit Cards Have Travel Perks
Even though multiple credit cards in my wallet provide trip insurance and other similar perks, here’s why I buy travel insurance. Every year, I buy an annual policy that covers my wife and I for a myriad of benefits. It covers us for the whole year, no matter where we go and how many trips we take. Why do I buy this, rather than just counting on the benefits that come for free with my credit cards? For us, it makes sense. You might realize the same thing applies to you if you travel a lot.
What Is Travel Insurance?
Travel insurance is a catch-all term for an insurance policy that covers you against financial losses during travel. Those losses could come from any number of things, such as lost property, travel delays, unforeseen expenses from emergencies, or even from injuries. This also includes things that cause you to miss or cancel the trip, due to the things I mentioned. The other thing that travel insurance includes is a company that’s meant to help you out during these unexpected turns of events.
It’s important to note that travel insurance doesn’t cover everything. People are realizing that during this pandemic. Most travel insurance policies don’t cover things like COVID-19 outbreaks or you not being allowed into a country because they changed their visa policies. You also can’t buy it to cover something that’s already happened, because insurance is for the future–not the past. You can’t buy travel insurance because a hurricane is heading towards your upcoming beach destination and you now plan to cancel the trip.
Different policies have more or robust coverage, depending on what you pay for. There’s also something called “cancel for any reason” insurance, which allows you to do just that: cancel for any reason. These policies typically have the most limited timeframe in which to buy. 10-14 days after the first dollar you put down on this trip will be the normal limit.
What Credit Cards Have Travel Insurance?
Chances are that you have cards that provide travel insurance coverage. I know I do. The 3 most popular cards in this hobby come with some pretty good types of travel insurance. Here’s a quick look at what they cover, because it’s also important to note what they don’t cover. There are important restrictions to understand that lay the groundwork for why I buy travel insurance.
Chase Sapphire Cards
The Chase Sapphire Preferred and the Chase Sapphire Reserve are considered the default starter cards in this hobby. They also come with some pretty good travel coverage:
- Trip cancellation/interruption insurance – up to $10,000 per trip for your pre-paid, non-refundable travel expenses
- Auto rental collision damage waiver – provides primary coverage with reimbursement up to $75,000
- Lost luggage reimbursement – up to $3,000 per passenger for checked bags
- Baggage delay insurance – reimburses you up to $100 per day for 5 days for essential purchases made while waiting for bags
- Trip delay reimbursement – coverage for unreimbursed expenses, such as meals and lodging, up to $500 per ticket during delays over 12 hours
The Platinum Card from American Express
Another favorite in this hobby, also full of travel perks, is the American Express Platinum Card. Along with its perks, the protections it offers are quite strong:
- Trip cancellation/interruption insurance – up to $10,000 per trip for your pre-paid, non-refundable travel expenses
- Auto rental collision damage waiver – provides secondary for an additional fee
- Lost luggage reimbursement – up to $3,000 per passenger for checked bags
- Baggage delay insurance – reimburses you up to $100 per day for 5 days for essential purchases made while waiting for bags
- Trip delay reimbursement – coverage for unreimbursed expenses, such as meals and lodging, up to $500 per ticket during delays over 12 hours
A Note About Business Cards
A quick note about business cards: sure, they do have some perks. You can get lost luggage perks and rental car coverage on some business cards. However, there are 2 key deficiencies here. Firstly, these are not consumer cards, so personal protections are greatly reduced. They largely focus on property and not so much on you. Secondly, since it’s a business card, you may be required to prove that you’re on a business trip to use the policy.
So What’s Missing?
These look pretty good. What’s missing? The biggest issue with all of these is that you must use that card to pay for the whole thing you want to cover. Want coverage for checked bags? You need to pay for that flight with that card. Want coverage on the rental car? You need to pay for that whole rental car with the card whose benefits you want.
What if I don’t want to worry about the card I’m using? If you’re like me, you’re almost always using a new card and putting every dime you spend on it. You’re working on minimum spend to earn the bonus points from a welcome offer. Why would I want to buy a plane ticket or pay for a rental car with something other than my new card? That creates a problem where I have cards with great travel perks that aren’t active during the trip.
And what about medical emergencies? Those can get costly. What if you’re hiking in a jungle, break your leg, and need taken to the nearest hospital…4 hours away? That doesn’t come cheap. Sure, these cards have a hotline to call for help, but you’re still paying the bill on your own. And what about the care you need for getting home safely while recovering? Not cheap at all. For reference, a medical helicopter ride should set you back at least $10,000.
Why I Buy Travel Insurance
These are 2 great reasons for why I buy travel insurance every year. If you don’t travel often, you can buy a “per trip” policy. There are tons of sites offering these, and Google can show you what they are (I don’t want you to think this is an advertisement for the company I use). You buy a policy that’s valid from the start date to the end date of your trip. Buy within 2 weeks of the first dollar you spend toward your trip to have the most options.
If you’re like me and don’t want to put your entire trip on an “old” card but prefer to spend on a “new” card, buying insurance makes sense. You’ll have no coverage otherwise. Also, if you travel a lot, buying all those 1-week policies can really add up. An annual policy can make sense for you.
I buy travel insurance because it covers everything–no matter where I go and no matter what credit card I used to book the trip. There are multiple companies offering annual travel policies, and an overview of when an annual policy is right for you is here. For me, all those short policies, the credit card considerations, and the lack of medical evacuation coverage when I go to some areas with sub-standard hospitals makes an annual policy a no-brainer for my wife and I. Annual cost: you’ll be surprised that it’s only $450 for the both of us for the whole year.
What We Get From This
So, what do we get from this that makes it worth it? Here’s a look at the annual benefits from our annual travel insurance policy:
- Trip cancellation – $5,000 per year
- Trip interruption – $5,000 per year
- Emergency medical – $50,000 per person, per trip
- Emergency transportation – $250,000 per person, per trip
- Baggage loss / damage – $1,000 per person, per trip
- Baggage delay – $1,000 per person, per trip (after 12hr delay)
- Travel delay – $1,600 per person, per trip / $200 limit per day
- Rental car damage & theft coverage – $45,000 per trip
- Business equipment – $1,000 per trip
- Business equipment rental – $1,000 per trip
- Change fee coverage – $500 per person, per trip
- Travel accident coverage – $50,000 per person, per trip
- Loyalty program redeposit fee – $500 per person, per trip
For this hobby, that last item is spectacular. If you have to cancel a trip at the last minute, you’re likely paying fees with airlines to get your miles back–some more than others. My annual policy covers the fees for getting my miles back!
Final Thoughts
When I first started this hobby, I thought I never needed to buy travel insurance. “My card has coverage!” It sure does, but it’s not always in effect. If you aren’t paying for your trip (or the elements in question) with the card that provides the coverage you need, the coverage doesn’t exist. If you like to pay for trips with whatever new card you’re spending on to earn points from a welcome offer, buying trip insurance might be in your best interest. For those who need more or more types of coverage than what your credit card offers, consider buying travel insurance coverage.
For me, what we would spend in a bunch of small policies on every trip costs much more than just buying a policy for the year. Maybe it doesn’t make sense for you, but I hope you think about your upcoming trips and what coverage you’ll have (and when it’s in effect!). Thinking through our situation is the reason why I buy travel insurance ever year. $450 is worth the peace of mind.
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Hello Ryan, I understood you use Allianz. I have not much experience with travel insurances but I heard a company called Heymondo, very convenient. Do you know them? Thanks
Louis – I have never heard of them to be honest.
Ryan. I know you said that you didn’t want to mention who you purchase from as to not sound like you’re advertising for them. But if you don’t mind me asking…who do you use (if you’re okay to speak of them) and if you have filed any claims, what has your experience been?
Right now I currently purchase protection per trip but reading your post here make me think that since we do plan on traveling a bit more (shy of some other COVID type shut down) it’s starting to make sense for us to do something like an annual plan.
Thanks in advance if you’re allowed to speak of who you have a plan with.
I personally use Allianz. They have a few different annual plans, depending on family size and level of benefits you want. They’re really good at replying to emails for claims in my experience.
I travel alone frequently and am over 60. While I try to use all the right cards for the points and insurance, I always buy an annual insurance policy for Medivac. But I pick one that provides a much higher amount than you do. It makes me feel safer, and hopefully makes my husband less worried about me. ((Although I did him him tell a friend that he never worried about me when I was galavanting around the world on my own. :~( ))
I buy travel insrance for trips ala carte(for a number of reasons). I have gotten back over $6000 in claims from issues over the years and will not go on a trip without out.
I have friends who ask me about miles and points, spend thousands on trips and when I say, “did you buy trip insurance,” they say no, of course they don’t need that, they have health insurance. Then I start listing things like trip delays, and baggage loss. “Don’t airlines cover that?” Depends.
With health insurance, I also mention that yes, your health insurance will probably cover at least some in country medical care, but it will most likely not cover getting you back to the US or the expenses for keeping your travel companions there, which also floors them. “You mean we would have to pay for my husband to stay with me or I’d be by myself until I could get home.”
No one wants these things to happen, but I’ve had stuff happen and know a fair amount of people who have as well so I always budget it into my trips.
Good point about no one paying for your family to stay there unless it’s specifically covered!
I’ve done some digging into travel insurance companies and I’ve found one problem in an awful lot of cases: companies absolutely despise stating clearly whether their insurance is primary or secondary. This concerns me a lot because if I’m in a situation where I need hospitalization in Asia, the last thing I need is Allianz and Blue Cross dickering over who’s stuck paying my bill and I get to figure out how to cover the cost while they argue. Have you come across any companies that clearly state that their insurance is primary? Last I checked Allianz did not, and they’re about the biggest in the business.
In my policy document for emergency medical: Please note that this is secondary coverage. If you have health insurance, you must submit your claim to that provider first. Any payment you receive from any other insurance provider will be deducted from your claim.
For me, I don’t have any other coverage that would apply in this situation, so that makes it simple for me. Not sure about your situation, so you’d have to check.
My experience with the Chase Sapphire Reserve insurance is that it’s absolutely worthless. I had a trip cancelled due to a qualified medical issue and it took me over 8 months and 40+ interactions with their call center to get the insurance payout. With every call, we discovered more things that they needed, and then there were things for which they asked, that they then didn’t need. It’s a total scam. I found that the process got considerably more efficient when I engaged the state insurance commissioner.
🙁 I hate to say it, but insurance companies typically are in the business of trying to not pay out.
@Ryan S … You are so right, my friend. And … it’s also why I’ve gotten myself familiar with the insurance commissioner’s office and the law. It’s been exceptionally helpful for the few claims (single digits in 35 years) that I’ve had to make. In Texas, the Commissioner’s Office will assign an independent adjuster and I’ve seen my settlement double, because they really leave no stone unturned. They really do follow the law, strictly.
That’s great info, thanks!
I had the same horrible experience with Chase Sapphire Reserve. Had to change a trip for the sudden death and funeral of my wife’s Dad. Not one penny from Chase for last minute airline rebooking and change fees for 5 of us at Christmas time. And they made it very difficult constantly moving the goal posts and also unknowledgeable and incompetent.
What was the end result?
What company do you use?
I would like to know too
I personally use Allianz All Trips, which has a few different tiers. There are others, also, so make sure to shop around.
Haha, exactly what I was thinking… guy writes an entire article about his travel insurance and doesn’t even mention the insurance company name! Haha.
Pamela – if you’d read the article, you’d notice the reason I specifically stated for not saying the name of the company I buy from.
Haha, something tells me that Pamela enjoys reading sponsored posts. I appreciate this post for what it was, as you clearly stated, without feeling like there was a financial reason you mentioned a particular company. Good information that makes me think twice about my reliance on CSR to cover me for every trip.
And that was the point 🙂 it’s not that I want people to get what I have, and the company I use doesn’t even know I wrote this most likely. It’s not a promotion, it’s about awareness that you could get stuck thinking you have coverage in the middle of nowhere and…surprise!
i have a chase saphire card which is supposed to provide travel insurance. six months ago
i had a heart attack and had to cancel a tour to thailand. i am still trying to get
the insurance to pay. the latest requirement, i have to prove that the tour company has not
offered me a credit towards future travel. it is very frustrating since this seemed like an open and shut
claim!
When I had to get proof of not receiving something in the past, proving something doesn’t exist became a headache. In the end, I sent an email saying “For my travel insurance, I need you to reply with this exact sentence: Your trip is canceled. You have no credit with us and no refund. You lost your money.” Something like that, but it still took 2-3 more emails to get them to do it. You’re right, it should be easier.