What is Credit Card Travel Insurance?

Credit cards don't only offer liberty to accrue the payment to the users but they also come with a bundle of added perks and benefits that attract the users to apply for a credit card. Every credit card has its own perks and benefits to help users and and get them to utilize those benefits over others.

12 Types of Travel Insurance Coverage

A much-underrated perk of using some credit cards is travel insurance. It is a kind of insurance coverage with added perks offered by some credit card companies to the users only while they are travelling. The offers and coverage depend upon the credit card company and the credit card that you have as the offer can vary from card to card. Credit card travel insurance can offer you relief in various emergency and problematic situations while you are travelling.

Here, we are going to unveil the kind of travel insurance coverage and benefits you can enjoy through your credit cards in Canada.

1. Trip Cancellation

This insurance coverage can offer a huge benefit when you have booked a non-refundable flight and you have to cancel the flight or the flight naturally got cancelled. This insurance coverage, albeit being rare, will make sure that you receive reimbursement despite the non-refundable nature of the flight. This usually falls under a list of approved emergency reasons, particularly in the case of non-cancellable and cheaper booked hotels or flights.

Of course, you must make all payments to the airline and hotels through that very credit card.

2. Trip Interruption

Trip interruption insurance helps you get reimbursed when you have to cut short your planned trip due to some unforeseen circumstances. In such cases, it reimburses you for interruption-related expenditures such as prepaid hotel bookings, last-minute flights and other expenses related to getting back home quickly.

3. Emergency Medical

This insurance coverage works as your health insurance while you are travelling. It helps you to cover all medical expenditures in cases of injury or sickness while travelling. Having a medical emergency during travelling can be a huge problem for you if you don’t have travel insurance. Medical expenses internationally can be quite high and result in a financial burden for many.

This coverage is fairly rare but a good number of the travel focused credit cards do provide it. Most of the cards provide 15 days worth of coverage while almost completely eliminating it for people over 65. In more unusual cases, some cards cover up to 60 days.

One of the very few cards that provides emergency medical for people over 65 is the Scotiabank Passport Visa Infinite card. It'll provide you with 3 days of coverage once you hit the age of 65, and will keep on going as long as you have no pre-existing condition in the prior year.

4. Baggage Delay

In cases where your luggage gets misplaced and you are unable to find it for a predetermined number of hours then this insurance coverage makes sure that you are reimbursed sufficiently. Through this insurance coverage, you will be offered reimbursement for the expense that you spent on necessities until your baggage is returned.

5. Baggage Loss or Theft

This insurance covers your luggage and can reimburse the amount of your loss if anything happens to your bag. The insurance is valid for both carry-on luggage and booked luggage. The credit card company reimburses you if the luggage is stolen, lost or damaged while you are on a trip. The coverage reimburses you for the amount equivalent to your loss that occurred due to the unfortunate incident with the luggage.

6. Travel Accident

If during your travelling journey, you encounter any unfortunate accidents that results in chronic injuries or even death then you may get adequate financial compensation. The compensation in these scenarios will be as per the terms and conditions of your credit card contract.

The format is generally like a lump sum payout up to $1,000,000 in travel accident insurance but it can vary a lot depending on the terms and conditions of your specific credit card, so make sure to read the fine print.

7. Flight delay

In case your flight gets delayed for more than a pre-set number of hours, this insurance coverage makes sure that you (and maybe your travelling partner) are reimbursed sufficiently for any necessary items like food, personal items or accommodations.

8. Emergency Travel Assistance

Some Credit card companies also offer travel assistance on a 24/7 basis where you can contact them and get help with certain issues that you undergo while you are travelling. These issues include legal assistance, medical assistance and information regarding travel plans.

9. Rental Car Theft & Damage

Credit card companies may also offer additional insurance for any damage to the rental car on your trip, but note that it's limited to only the vehicle itself. When you do have this coverage, you can safely reject any additional coverage the rental company might add to your contract and save money.

10. Rental Car Accident

This coverage isn't related to the rental car itself, any medical expenses or damage done to someone else's property but rather it's a lump sum payment for specific personal injuries or death of passengers travelling in the vehicle. Note that this payment is determined based on the severity of the accident and can vary a lot.

11. Hotel Burglary

This insurance coverage protects you financially and reimburses the amount equivalent to your personal belongings stolen from the hotel room during the trip. It's a somewhat better coverage compared to lost or stolen baggage insurance where it's only eligible while you're in transit.

12. Personal Effects

This insurance coverage is extremely rare and essentially covers any of your personal belongings in cases of them being lost, damaged or stolen at any point during your trip.

That's pretty much the major differentiating factor here.

Most credit cards give you coverage for when you're in transit or in hotel room but not necessarily at every point during your trip. The only bank in the big 5 that offers this type of insurance coverage is BMO and all of their BMO World and World Elite credit cards do have this coverage.

Can every credit card user actually utilize these benefits?

Some credit cards offer such extensive benefits to their users while others offer a few benefits among this comprehensive list. Some credit card companies follow the rule that travels insurance benefits are subject to the use of credit cards. For example, if you pay for more than half of the trip through credit card then most of the companies offer an exceptional travel insurance plan including all perks and benefits.

It is imperative that you thoroughly read and understand the terms and conditions shared by the credit card company with you. Reading the documents will help you ascertain what benefits can you avail and what not. This way you won’t make any uninformed decisions.

The perks of having credit card travel insurance

Credit card travel insurance can save you from trouble as stated above. It can offer you an easy way out financially in case of any unforeseen circumstances. Credit card insurance is quite under-rated as most people assume that travel insurance is only an alternative health insurance Having health insurance in Canada, such people think that they won't need travel insurance.

Here are some of the benefits that you can enjoy while having credit card travel insurance:

Evacuation Assistance

The insurance covers the evacuation assistance which is a huge relief for any passenger. Any incident can delay the flight or even cancel the flight. In such cases, having travel insurance is a real blessing as it helps you to pay the expenses for evacuation without a heavy heart because they know that you will be reimbursed adequately. This insurance covers less severe incidents such as evacuating through transport in case of a political incident or bad weather that delays the flight to incidents of severe extent such as a medical emergency that needs evacuation through a private jet.

Financial Security

The greatest benefit of this insurance is that you don’t have to worry about financial expenses when you come across any trouble during a flight or trip. It saves you from the worry of managing finances when you are in any crucial situation. Be it a flight delay due to poor weather conditions, a medical emergency due to severely poor health, or lost luggage containing all your essential valuables. Having comprehensive travel insurance means that you will only worry about the situation at hand without thinking about the financial cost you are going to incur. Even though some credit card companies require that you pay the expense from your pocket knowing that it will be reimbursed soon, it doesn’t feel like a financial burden. You can focus more on the troublesome situation when you know that the finances are bearded by travel insurance.

Ease of Mind

When you have travel insurance as a financial backup for emergencies then you can plan bold travel tours with mental relaxation. If you have an adventurous soul who wants to explore the world then with travel insurance you can plan to see any corner of the world without having to double think about any uncertain and unfortunate incident. Be it a trip to a place with dead snow or scorching heat, you can plan to go ahead when you are mentally relaxed due to financial assistance through travel insurance.

Worldwide medical insurance

In Canada, most health insurance plans do not offer medical coverage outside the Canadian border. Many of those who do agree to pay the medical coverage when you are outside Canada do deduct some amount from total coverage which makes you double think to plan a trip outside Canada thinking about the possibility of a medical emergency. Travel insurance is bliss in such a situation as it offers worldwide medical insurance and reimburses you for medical emergencies during your trip no matter which country you are exploring.