What your credit card's trip protection covers — and what it doesn't

When things go awry, you'll thank yourself later when you have travel insurance. Thankfully, many rewards credit cards offer complimentary protections as long as you pay for prepaid, nonrefundable travel expenses with the card, giving you peace of mind when you embark on your journey.

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Let's take for example the Chase Sapphire Preferred Card, a popular travel rewards card with a reasonable $95 annual fee. Among all of its great travel benefits, it also comes with trip cancellation and interruption insurance, along with trip delay reimbursement, with a substantial level of coverage that may prevent the need for you to buy separate travel insurance.

We're often asked if these credit card trip protections will cover the price of a new flight in the event of a delay or cancellation. More broadly, we'll discuss what's covered (and isn't covered) so that you can manage your expectations on your upcoming trip. For the purposes of this guide, I'll continue to use the Chase Sapphire Preferred as the example, but be sure to read the fine print for your credit card's specific terms on trip insurance.

Trip cancellation and interruption insurance

First, let's quickly go over trip cancellation and interruption insurance, as outlined by Chase:

"If your trip is cancelled or cut short by sickness, severe weather and other covered situations, you can be reimbursed up to $10,000 per person and $20,000 per trip for your pre-paid, non-refundable travel expenses, including passenger fares, tours, and hotels."

At first, that $10,000 limit per person (or $20,000 per trip) seems quite high, but in reality, it's unlikely that you'll max out — or even get close to maxing out — this benefit.

Then, it goes on to state that "reimbursement can be provided for prepaid, non-refundable travel expenses including passenger fares, tours and hotels." If the airline, hotel or tour operator does not refund you for your prepaid travel expenses, that's when you can file a claim under trip cancellation and interruption insurance to get reimbursed for these costs.

The key words here are prepaid and non-refundable, meaning you won't get reimbursed for any new travel accommodations made because of the cancellation or interruption.

Related: How I used Chase’s trip cancellation coverage to recoup $800 in non-refundable airfare

Trip delay reimbursement

The terms are similar for trip delay reimbursement on the Chase Sapphire Preferred:

"If your common carrier travel is delayed more than 12 hours or requires an overnight stay, you and your family are covered for unreimbursed expenses, such as meals and lodging, up to $500 per ticket."

As with the trip cancellation and interruption insurance, the trip delay policy only offers reimbursement for specific expenses, which are outlined as "reasonable additional expenses incurred for meals, lodging, toiletries, medication and other personal use items due to the covered delay." Therefore, you can expect to get reimbursement for essential items that you have to purchase as a result of the delay, such as meals or an overnight hotel stay.

However, this does not mean you can buy a new flight on a different carrier and get reimbursed.

Related: Here’s what to do if your flight is delayed or canceled

Will trip insurance cover the cost of the new flight?

If you've made it this far, you probably can infer the answer to this question. In short, the answer is no. Whether you file a claim under trip cancellation and interruption insurance or trip delay reimbursement, you will not get reimbursed for new airfare. That means, if you buy a $100 United flight that gets canceled (or delayed), and you end up purchasing another $300 flight on Delta instead, neither card protections will cover the cost of new airfare.

I recently learned this the hard way on my solo trip to Europe. I'll save you the long story, but my flight from Italy to Greece was canceled, forcing me to rebook and thus reroute myself through an airport two hours away. After buying a new flight, hopping on a bus and waiting patiently in the terminal for the next flight, I tried filing a claim with with my Chase Sapphire Preferred.

This may seem frustrating, but you'll still get reimbursed for prepaid, nonrefundable expenses with trip cancellation and interruption insurance.

Bottom line

It's great that many travel credit cards come with benefits such as trip cancellation and interruption insurance and trip delay reimbursement, but it's important to read the terms to see what exactly these benefits will cover. While these protections may be sufficient for most travelers, those who want higher coverages should seriously consider buying travel insurance that offers more protection or "cancel for any reason" coverage.