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Chase Sapphire Preferred Ups Auto Coverage, Nixes Dividend

by on July 21, 2014 · 55 comments

in Card review, Chase, Chase Sapphire Preferred, Credit Cards

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The Chase Sapphire Preferred card is one of the top all-around travel credit cards- offering both valuable earning capability (2 points per dollar spent on travel and dining) and strong redemption options with 11, 1:1 transfer partners and 1.25 cents per point when redeemed for travel through Ultimate Rewards.

Chase Ultimate Rewards transfer partners

Chase Ultimate Rewards transfer partners

Benefit Changes
This weekend, Chase made some changes to the value proposition by beefing up auto rental coverage and trip cancellation/interruption, but also discontinuing the 7% annual dividend for new cardholders (and phasing it out by 2016 for existing cardholders). These changes will be communicated to existing cardholders over the next couple months, but I just got the new membership packet from my contacts at Chase, so here are the details. If you have any questions, feel free to comment and I’ll see if they’re listed in the extended packet; if not, I can ask my contacts at Chase for more information.

Details:

1) Auto Rental Collision Damage Waiver coverage goes from secondary to primary, meaning if you rent a car with your Sapphire Preferred, they will cover a loss of the vehicle (with some exclusions) before your insurance, meaning you don’t need to pay for coverage when renting a vehicle.

2) Trip cancellation/interruption coverage increases from $5,000 too $10,000.

3) The 7% Annual Dividend is no longer offered as a perk to new cardholders. Existing cardholders (who got the card before July 20, 2014) will still get the 7% dividend for 2014 and 2015 (so the last dividend payout will be in the first quarter of 2016).

My Chase Sapphire Preferred and Barclaycard Arrival Plus are my key cards- especially when traveling abroad

Chase Sapphire Preferred and Barclaycard Arrival Plus are my key cards- especially when traveling abroad

Key coverage details from the new Sapphire Preferred Benefits Guide:

What steps do I need to take to ensure that Auto Rental CDW is in effect when I rent a vehicle? 

  1. Initiate and complete the entire rental transaction using your card that is eligible for the benefit.
  2. Decline the rental company’s collision damage waiver or similar provision if it is offered to you. The company may refer to the collision damage waiver as CDW or LDW in their contract or when speaking with you. if you accept the collision damage waiver offered by the rental company, you will not be eligible for Auto Rental CDW.

Who is eligible for coverage?

You, a person to whom a United States (U.S.) credit card has been issued (“Cardholder”) and your name is embossed on the card. You are then covered as the primary renter of the vehicle and any additional drivers permitted to operate it under the terms of the rental agreement (“Authorized Person”) are also covered. 

What is covered?

Auto Rental CDW reimburses you for covered losses to the rental vehicle while it is in your control or in control of another Authorized Person. The benefit only covers vehicle rental periods that do not exceed or are not intended to exceed thirty-one (31) consecutive days within or outside of your country of residence.

Covered losses are:

  • Physical damage and/or theft of the covered rental vehicle
  • Valid loss-of-use charges assessed by the rental company while the damaged vehicle is being repaired and is not available for use, as substantiated in the company’s fleet utilization log
  • Reasonable and customary towing charges related to a covered loss to take the vehicle to the nearest qualified repair facility.Auto Rental CDW is primary coverage and provides reimbursement up to the actual cash value of the vehicle as it was originally manufactured. Most private passenger automobiles, minivans, and sport utility vehicles are eligible for coverage, but some restrictions may apply.

What types of rental vehicles are not covered? 

  • excluded worldwide are: expensive, exotic, and antique automobiles;certain vans; vehicles that have an open cargo bed; trucks; motorcycles, mopeds, and motorbikes; limousines; and recreational vehicles.• examples of excluded expensive or exotic automobiles are these brands: Aston Martin, Bentley, Bricklin, Daimler, DeLorean, Excalibur, Ferrari, Jensen, Lamborghini, Lotus, Maserati, Porsche, and Rolls Royce. However, selected models of BMW, Mercedes-Benz, Cadillac, and Lincoln are covered.• An antique automobile is defined as any vehicle over twenty (20) years old or any vehicle that has not been manufactured for ten (10) years or more.• this benefit is provided only for those vans manufactured and designed to transport a maximum of eight (8) people and which are used exclusively to transport people.
    My 9,179 point dividend from 2011.. will be sad to see this benefit go away

    My 9,179 point dividend from 2011…will be sad to see this benefit go away.

7% Dividend
The 7% dividend has been a great perk of the card and I’m sad to see it go. Though I have to say I’m happy they’re keeping it for the remainder of 2014 and 2015 as well for existing cardholders. I can see how they’ve opted to increase the auto/trip cancellation coverage, because those are more tangible benefits for travelers that are easier to advertise. The 7% annual dividend is a nice “cherry on top” type of benefit, but was never a major driver because there are other cards that offer more lucrative incentives, including Chase Freedom‘s 10% bonus for checking customers and rotating 5x categories. 

Trip Interruption and Cancellation Coverage
When you book a trip with your Sapphire Preferred, the coverage amount of interrupted/cancelled trips due to certain events is now upped from $5,000 to $10,000. Here are some key details:

Who is covered?

You, the Primary Insured Person, and your Immediate Family Members are automatically covered. Immediate Family Member means your Spouse or Domestic Partner and their children, including adopted children or step-children; legal guardians or wards; siblings or siblings-in-law; parents or parents-in-law; grandparents or grandchildren; aunts or uncles; nieces or nephews. 

What is Trip Cancellation insurance?

Trip Cancellation insurance reimburses you or your Immediate Family Members for up to ten thousand ($10,000.00) dollars for each Covered Trip if a Covered Loss prevents you or your Immediate Family Members from traveling on or before the departure date and results in cancellation of the travel arrangements.

If any or all of the Covered Trip was paid for using redeemable Rewards, the Company will reimburse the Insured Person for Rewards used. The Company’s reimbursement shall equal the monetary value of the redemption through the Common Carrier, Tour Operator, Travel Agency, or Travel Supplier up to the Benefit Amount. 

Covered Trip means any pre-paid tour, trip or vacation when some portion of the cost for such travel arrangements less any redeemable frequent flyer miles, points, coupons or certificates, or other types of redeemable Rewards has been charged to your Account:

  • while the insurance is in effect
  • to a destination of greater than one (1) mile from your primary residence
  • and is for a time period that doesn’t exceed sixty (60) days in duration
  1. Covered Loss means one of the following events that occur when you or an Immediate Family Member is insured under the policy and the event causes cancellation of the travel arrangements: • Accidental Bodily Injury, Loss of Life, or Sickness experienced by you, a Traveling Companion, or an Immediate Family Member of you or a Traveling Companion • Severe weather, which prevents a reasonable and prudent person from beginning or continuing on a Covered Trip • Change in military orders for you, your Spouse, or your Domestic Partner • A terrorist action or hijacking • A call to jury duty or receiving a subpoena from the courts, neither of which can be postponed or waived

    • Finding your or your Traveling Companion’s dwelling to be uninhabitable

    • Quarantine imposed by a Physician for health reasons

    • Financial insolvency of the Travel Agency, Tour Operator, or Travel Supplier whose services you booked 

  1. What is not covered by Trip Cancellation insurance? It does not apply to a Covered Loss caused directly or indirectly from:
  • travel arrangements canceled or changed by a Common Carrier, Tour Operator, or any Travel Agency unless the cancellation is the result of severe weather or an organized strike affecting public transportation
  • change in plans, financial circumstances, and any business or contractual obligations applying to you, your Traveling Companion, your Immediate Family Member, an Immediate Family Member of your Traveling Companion
  • a Pre-existing Condition
  • Additionally, this insurance does not apply to any Accident, Accidental Bodily Injury or loss caused by or resulting from, directly or indirectly: the commission or attempted commission of any illegal act including but not limited to any felony
  • any occurrence during incarceration
  • being engaged in or participating in a motorized vehicular race or speed contest
  • participating in any professional sporting activity for which a salary or prize money is received
  • traveling or flying on any aircraft engaged in flight on a rocket propelled or rocket launched aircraft
  • suicide, attempted suicide or intentionally self-inflicted injury
  • when: a) the United States of America has imposed any trade or economic sanctions prohibiting insurance of any Accident, Accidental Bodily Injury or loss; or b) there is any other legal prohibition against providing insurance for any Accident, Accidental Bodily Injury or loss
  • a declared or undeclared WarThe Trip Cancellation benefit is excess over any travel insurance purchased by the Insured Person for the same Covered Trip or other indemnity by the airline, cruise line, railroad, station authority, occupancy provider available to the Insured Person.

My Thoughts
Overall, I’ll be sad to see the 7% Dividend go away, but I’m glad they’re keeping it for 2014 and 2015 for existing cardholders. The auto coverage is definitely a valuable perk that will make the Sapphire Preferred my go-to card when renting cars since it gives 2x points and has no foreign transaction fees.

Even though the 7% dividend is no longer a perk, the card still has a strong value proposition for travelers- especially since the sign-up bonus is 40,000 points after $3,000 spent within 3 months and the $95 annual fee is waived the first year. I’d like to see Chip+ PIN technology and some new transfer partners added in the future, but I’m currently happy as a cardholder and don’t think the loss of the 7% dividend will be a deal breaker.

What are your thoughts on these changes?

Disclaimer: The responses below are not provided or commissioned by the bank advertiser. Responses have not been reviewed, approved or otherwise endorsed by the bank advertiser. It is not the bank advertiser's responsibility to ensure all posts and/or questions are answered.

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  • matthewD

    Is the primary rental coverage effective immediately?

  • thepointsguy

    Yes, as of July 20, 2014

  • Jason

    Does it matter who you book the rental car through initially? Priceline for example?

  • trppn

    Does the CDW work in Ireland? I know they have stingy requirements for CDW from CCs

  • Joe

    Less helpful for me, though to be honest 7% doesn’t earn me a ton anyway. But, I never rent a car, so this is a net negative.

  • Gordon

    I’d be curious what the experiences are of anyone who has had to actually handle an auto collision claim when the coverage was obtained as a ‘benefit’ from a credit card like this.
    I used to decline the rental CDW etc., and rely on the coverage from the credit card – until I read the small print (on my British Airways Chase Visa IIRC).
    The small print indicated that I was personally responsible for obtaining and submitting at least 2 repair quotes to the credit card people. So when I’m driving to the airport on the last day of my trip, about to get my return flight and someone rams me, exactly how do I go about organizing those 2 quotes ? It sounded like such a potential nightmare to deal with, that I now just pay for CDW.

  • Ed

    On top of that, car rental agencies refuse to make utilization logs available to third parties. And without those, Chase will not cover the loss.

  • matt

    If I closed the chase sapphire preffered visa card a year ago, could I get the bonus again?

  • dcsells

    The rental car coverage doesn’t extend to DeLoreans? There goes my planned trip to 1955.

  • BMATT

    Interesting. Well, I believe the 7% is a lost at any rate. If you send a significant amount on the card, it is still 7% that you will no longer receive. Luckily, I have been using my Freedom with 10% a bit more for everyday purchases (except dining and travel – unless dining is at 5x points). Last month I did have the use the Rental Coverage. I had an uninsured lady hit me and cause approx. $5k in damages to the rental car. I called Chase and within 5 minutes had the claim form in my inbox. Luckily, the rental company only charged me $86 for the entire event, therefore, I didn’t use the coverage. As of current, if you don’t have auto insurance on a personal vehicle (ex: maybe you have a company car) then it will automatically become primary coverage, this is disclosed in the current benefits information.

  • thepointsguy

    The application states “I understand that any new cardmember bonus offers for this product are not available to either current or previous cardmembers of this product who received a new cardmember bonus for this product in the last 24 months.”

  • thepointsguy

    Nope

  • Andrew

    Hi,
    Could someone explain whether this new auto coverage is common among cards? I have many cards that claim auto rental coverage (like Ink), but is that coverage likely to be secondary? Also, as poster Ed claims, does this insurance actually work or is it a mirage?

  • matt

    So I need to wait 2 years from the date I recurved the bonus?

  • Fred

    So, now with the new Auto Coverage, how does this compare to the AMEX Plat?

  • thepointsguy

    Amex Platinum charges for premium coverage, so I’d say Sapphire Preferred has the edge here

  • Diane

    No, we paid the extra insurance in Ireland in April.

  • trppn

    that was with a CC CDW? Which card did you use?

  • Diane

    I called in advance and talked to the Chase rep and she confirmed that the insurance won’t work in Ireland. I used the Barclaycard to pay for the extra insurance, which ended up being free through their travel points.

  • trppn

    Were you using CSP? This benefit of primary CDW is brand new as of today

  • Kioly

    Yes, it now covers all countries (previously excluded Ireland, Israel, & Jamaica).

    If it makes you feel any better you can call Chase and ask for a letter stating such to bring with you.

  • Kioly

    That was the case then, but it just changed.

  • MX Traveler

    We traveled to Mexico earlier this year and purchased rental insurance there because it can get sticky. Not to mention their pushiness is somewhat over the line, but that is for another day… With this being primary and not secondary do you know how it might work when down there? Would you still need to purchase it from the rental company or would this suffice?

  • Edgar Perez

    Does the coverage apply for a points rental like a National Free rental day when nothing is charged on the card do you think?

  • Jeff

    The new insurance coverage is of no value to me as my personal insurance covers me no matter which car I drive, including a rental car. I believe this is probably the case for many others with quality insurance, but they don’t know it.

  • Miza

    @Diane

    What’s the reason they said it wouldnt work in Ireland? It doesn’t list any excluded countries that is why I’m surprised at the possible reason why Ireland would be excluded

  • AK Credit

    Hi TPG:

    I have a CSP MC that i opened JAN-13 and Chase said it will be converted to a Visa in the next month or so. Can i cancel anytime and apply for a visa and still get the bonus? thank you in advance

  • J

    Can you clarify he cutoff date is for the 7% benefit with your chase contacts? I was approved on 15th but did not receive and activate my cars until the 21st. Do I get the dividend bonus?

  • Ian

    Aren’t the auto damage and trip cancellation/interruption protections Visa Signature protections? Are the changes to these Visa Signature services also being made to the Freedom then? If not, what are the overall differences between the CSP’s Visa Signature benefits and the Freedom’s Visa Signature benefits?

  • RakSiam

    I’ve been using the Amex Plat $25/rental insurance coverage as well. But this included benefit is certainly preferable.

    Last car I rented was via the UR website and got a great rate that way. So this is a nice added perk.

  • Daniel

    Well, we all saw (or should have seen) this coming, when the 7% disappeared from the promotional websites. Definitely a disappointment, and this makes both Fidelity Amex and Barclay Arrival+ slightly more likely to be useful for domestic restaurants/travel and foreign restaurants/travel, respectively. Reimbursing for travel, though, the CSP still gives 2.5 cents on the dollar through UR, so for domestic economy travelers, CSP still wins for these categories. But the rental coverage is definitely nice, although it seems like the kind of thing where depending on the country, it could be tricky to get enough documentation. Probably it is worth specifically asking ahead of time about what to do in such situations, and getting that in writing.

  • chris

    This change just pushed me to get a Barclaycard Arrival+. Between United earning and redemption changes in the past 2 years (the only transfer partner I used with UR points), the end of the 7% dividend, and still not having a chip-and-anything option, the Sapphire Preferred is no longer worth its annual fee.

  • Ian

    Are they also making these changes to the Freedom’s Visa Signature benefits ?

  • alex

    Everyone should keep in mind that the Chase uses a third party company for insurance claims and they do everything possible to overwhelm you wiht requests until you finally give up on the claim. It happened to me TWICE and doing a Google searh i saw that many people has the same problem. So what good is insurance for trip cancellation or auto coverage if you cannot make the claims??
    On the contrary never any problmem with AMEX. I never trust Chase cards as many others who have ad same problem.

  • Koalakins

    Not to be a complete and total fangirl… But, I hope my passport looks like yours one day :D

  • thepointsguy

    I’m completely flattered!

  • thepointsguy

    I don’t believe so

  • thepointsguy

    Hmm I think if the reservation is made with your card on file and you present it for incidentals it should be covered, but I’d call to confirm before you depend on the coverage

  • Fred

    So, say I rent with Hertz, would I be able to use my AMEX Plat CDP to obtain a discount and then pay with Sapphire in order to get the coverage and double points?

  • Daniel

    I called them and asked. I suggest you do the same. Of course, that isn’t the same as when it happens, but if they have a call on record, you will be much more likely to be well served. In case you’re curious, the answer was that they want to see the rental contract, and a forwarded copy of the bill, once the rental company bills you, and they ask but don’t require that you take pictures and/or include an incident report, if one exists.

  • ohmark

    Reading the above as to what is a “covered trip” under trip cancellation: “Covered Trip means any pre-paid tour, trip or vacation when some portion of the cost for such travel arrangements less any redeemable frequent flyer miles, points, coupons or certificates, or other types of redeemable Rewards has been charged to your Account.” Does this mean that if any portion of the trip, no matter how small, is paid for with the card, the entire trip is covered up to the limit? Or does the language beginning “less any redeemable…” change the meaning to something else like that the entire amount of the trip must be paid for on the card, less any coupons, certificates or other types of redeemable awards? Comments?

    Read more: http://thepointsguy.com/2014/07/chase-sapphire-preferred-ups-auto-coverage-nixes-dividend/#ixzz38aPeOrHs
    Follow us: @thepointsguy on Twitter | thepointsguy on Facebook

  • Jake

    Does the car rental coverage apply on reservations made with Ultimate Rewards points??

  • cbogs

    I applied and was approved for the card on 7/23. The following was in the “Terms and Conditions” in the fine print of the “Welcome to Chase Sapphire Preferred” e-mail I received:

    “You’ll receive a 7% Annual Points Dividend on all new points earned on purchases made with your ChaseSapphire Preferred card during the previous year…Your 7% Annual Points Dividend will appear on your January or February billing statement.”

    Thoughts? Do you think this means I’m in for 2014 and 2015, or will they call it an error on their part?

    Thanks!

  • Roy H
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  • Matthew Potter

    No, you still get 2x on travel, but they are discontinuing the extra 1x that you get for booking through the Ultimate Rewards Portal. Currently you can get 3x on travel booked through the chase website.

  • Roy H

    ah thanks..it wasnt very clear. After re-reading it that makes sense.

  • Jim Smaltz

    I find your article interesting. I got an e-mail showing the changes to their program and found one item not included in your discussion.

    “Earn on Travel

    You will continue to earn an extra 1 point for each $1 of airfare and hotel accommodations booked through Chase.com/UltimateRewards until 12/31/2015. After that, you will no longer earn an extra point. We may periodically offer ways for you to earn bonus points through the program.”
    I’m wondering why I would consider continue paying the higher annual fee and loose double points on Travel and Hotels.

  • Jim Smaltz

    I had also misunderstood also …I thought we were loosing 2x on travel

  • Angela

    I’m confused by the insurance coverage. Do you still need liability or does it cover you completely?

  • http://patik.com/ Craig Patik

    For me this change is a net negative and I’ll likely cancel the card once the 7% ends. I never rent cars — I’m a train guy — and the 7% dividend was how I justified the annual fee (they essentially cancel each other out). I was also mildly annoyed to find out that you can’t book Amtrak through UR for extra points.

    Hopefully by 2016 there will be a true chip+PIN card with no foreign transaction fees to replace this card.

  • Frank

    My question is what is the point of the Sapphire Preffered vs the Regular? The 7% dividend and the 3 points from using the portal were the primary difference between the two. I do not understand what I pay $95 a year for now.

  • tu11

    You’ll get the ability to transfer those points to airlines/hotels, unlike the standard edition. You’re also getting no transaction fees overseas, and an increased sign up bonus (without a cost for the first year anyway).

  • tu11

    Probably. The CDP and Coupons aren’t necessarily linked to your payment method or portal, but rather to rental conditions. For instance.. I’m Avis First and have a CDP through WorldElite Mastercard. But, because of the CDW coverage and no f/x fees, I pay with CSP. I’ve yet to experience any issues…

  • tu11

    Primary is only offered on a handful of cards, secondary is commonplace. Google around for the specific cards which offer it.. Chase tends to be heavy (CSP, United, Ink I think, RitzCarlton, etc.) on them compared to other institutions..

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