Chase Sapphire Preferred Ups Auto Coverage, Nixes Dividend
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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.
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.
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).
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?
- Initiate and complete the entire rental transaction using your card that is eligible for the benefit.
- 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.
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
- 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
- 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.
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 50,000 points after $4,000 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?
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