Why you might want to get a premium credit card instead of purchasing travel insurance
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Editor’s note: This post has been updated with additional content, including new analysis and different viewpoints. It was originally published on Aug. 11, 2018.
After seeing posts in various online travel communities about instances where travel insurance saved the day after long hospital stays or necessary medical evacuations — as well as posts by travelers lamenting financial troubles caused by not having insurance — I was initially convinced it would be irresponsible to travel without purchasing travel insurance.
However, I also know that some credit cards provide travel insurance when you put trip expenses on your card. So, when my multi-trip annual trip insurance plan lapsed in July 2018, I considered whether it made sense to purchase a new policy. In short, it didn’t. In this guide, I describe how my husband JT and I insure ourselves, and how you may be able to do the same if you have and use the Chase Sapphire Reserve.
What travel insurance covers
Travel insurance — whether provided by your credit card or a plan you purchase — may provide the following types of coverage:
- Trip and transit protections (trip delay, delayed baggage, lost/damaged baggage, trip cancellation, trip interruption, travel accident insurance, 24 hour assistance service)
- Emergency medical/dental coverage
- Evacuation protection (medical and/or non-medical)
- Collision damage waiver for rental cars
You can purchase travel insurance that provides these types of coverage or rely on the travel insurance provided by select credit cards. In this guide, I will describe the protections provided by the Chase Sapphire Reserve. Although some other cards provide some similar protections, I believe the Chase Sapphire Reserve provides the most comprehensive travel protections and is the card JT and I use for that.
Trip and transit protections
In order to get the trip and transit protections usually offered by travel insurance plans, we pay for at least part of our flights, trains and other types of common carrier transportation fare using our Chase Sapphire Reserve. (Although Amex is adding select travel protections to some of its cards in January 2020, we will continue to use our Chase Sapphire Reserve for most of our common carrier travel because Amex’s protection will only cover round-trip flights and still won’t provide baggage delay protection.)
As a reminder, the Chase Sapphire Reserve offers the following trip and transit protections:
- Trip delay reimbursement: Up to $500 per ticket for reasonable expenses during a delay of more than six hours or overnight. You must currently be on a trip from your primary residence of 365 days or less. The cardholder, cardholder’s spouse and cardholder’s dependent children under 22 are covered.
- Baggage delay benefit: Reimbursement of up to $100 per day for up to five days for emergency purchase of essential items when baggage is delayed or misdirected for more than six hours. The cardholder and the cardholder’s immediate family are covered.
- Lost luggage benefit: Reimbursement for repair or replacement of checked baggage and/or carry-on baggage that is lost or damaged. Up to $3,000 per covered person, but only up to $500 per person for electronics and jewelry. The cardholder and the cardholder’s immediate family are covered.
- Trip cancellation insurance: Reimbursement of up to $10,000 when a covered loss prevents you or your immediate family from departing on a covered trip of 60 days or less. The cardholder and the cardholder’s immediate family are covered.
- Trip interruption insurance: Reimbursement of up to $10,000 when a covered trip of 60 days or less is interrupted by a covered loss. The cardholder and the cardholder’s immediate family are covered.
- 24-hour travel and emergency assistance services: Assistance and referral services for emergency services. The cardholder, cardholder’s spouse and cardholder’s dependent children under 22 may use this benefit.
These benefits cover you on short and long trips that are both domestic and international, as long as you use your Chase Sapphire Reserve to pay for at least part of your common carrier travel. Long-term travelers should keep in mind the 60-day trip maximum for trip cancellation and interruption insurance as well as the 365-day trip maximum for trip delay insurance.
Emergency medical / dental coverage
If you use your Chase Sapphire Reserve to purchase at least part of your common carrier fare, you and your immediate family can use the card’s emergency medical and dental benefit for emergency treatment expenses on trips between six and 59 days. This benefit provides $2,500 (subject to a $50 deductible) for medical or dental expenses not paid by your insurance as a result of emergency treatment of a sickness or accidental injury.
If you have health insurance that provides coverage outside the U.S. after an “out of pocket maximum,” then supplementing this coverage with the Chase Sapphire Reserve‘s emergency medical and dental benefit may provide adequate protection against catastrophic medical expenses. The BlueCross BlueShield of South Carolina PPO plan that JT and I are enrolled in as TPG employees provides coverage internationally as out-of-network care. We have an out-of-pocket maximum of $8,000 per person for out-of-network care, so our potential financial risk from medical issues is limited to $8,000 per person per year.
If your medical insurance won’t cover you at your destination and you aren’t going to purchase travel insurance, you should consider purchasing travel medical insurance. GeoBlue and IMG Global are two well-recommended companies that offer competitive travel medical insurance plans.
Medical evacuation protection
Medical evacuation protection is the main reason we initially bought travel insurance. However, by purchasing at least part of your common carrier transport using the Chase Sapphire Reserve, you and your immediate family will be covered on trips of five to 60 days for up to $100,000 in emergency medical evacuation coverage. The main requirements are that the trip is at least 100 miles from your primary residence and Chase’s Benefit Administrator must make the medical transportation arrangements. Evacuation within 12 countries — and additional countries that are determined by the U.S. government to be unsafe for travel — is excluded, but pre-existing conditions aren’t excluded.
The medical evacuation coverage provided by the Chase Sapphire Reserve should be adequate for most travelers. However, if your trip will last more than 60 days or less than five days — or you are visiting areas where an emergency medical evacuation could cost more than $100,000 — having The Platinum Card® from American Express may be useful.
With an annual fee of $550 (See Rates & Fees) The Platinum Card‘s emergency medical transportation benefit covers the cardmember and other covered family members — spouse or domestic partner, dependent up to age 23 (or age 26 if full-time student traveling on the same itinerary as the cardmember) — if they become injured or suffer an illness while traveling on a trip of less than 90 days. As with the Chase Sapphire Reserve benefit, the Premium Global Assist Hotline medical department must assess your medical needs and coordinate your transportation. Although there is no cap on the coverage, pre-existing conditions are excluded.
Collision damage waiver for rental cars
Various credit cards provide collision damage waivers for rental cars. In most cases, all you have to do is pay for the rental car with the credit card and decline the rental company’s collision loss/damage insurance.
We use the Chase Sapphire Reserve to pay for car rentals because it provides primary collision damage waiver insurance for most types of rental cars, while also earning three Chase Ultimate Rewards points per $1 on the rental car (after your $300 annual travel credit is exhausted). Specifically, it provides reimbursement for damage due to collision or theft of most rental vehicles up to $75,000 when rented for less than 31 days. Most types of rental vehicles are eligible, but antique automobiles, certain vans, vehicles that have an open cargo bed, trucks, motorcycles, mopeds, motorbikes, limousines and recreational vehicles are explicitly excluded.
Most American Express cards offer secondary collision damage waiver insurance, but you can enroll in Amex’s Premium Car Rental Protection for a relatively small amount per rental to get primary coverage if you’re using an Amex card.
Should I purchase travel insurance or rely on credit card protections?
JT and I live on the road as location-independent digital nomads, so our situation is different from most travelers. Based on our situation, we believe we’re adequately covered between the protections provided by the Chase Sapphire Reserve, The Platinum Card from American Express and our health insurance. Filing claims with Chase’s Benefits Administrator can be time consuming and frustrating, but I’ve always been successful when I’ve filed trip delay and baggage delay claims.
This doesn’t mean we never purchase travel insurance. For a recent 11-day trip to Liberia in West Africa for PeaceJam, JT and I purchased a travel insurance policy from Seven Corners for $33 that would cover both of us. Liberia is a least-developed country according to the United Nations, had an ebola outbreak as recently as 2015, had two civil wars that ended in 2003 and has a limited number of flights each day to other countries, so we wanted additional coverage that included evacuation for non-medical reasons. Due to our health insurance’s $8,000 out-of-pocket maximum per person, I was able to select a low medical maximum benefit per person, which kept our plan cost low.
If you travel frequently from a home base, you may find that an annual travel insurance plan can provide value. Allianz and Seven Corners both offer well-rated annual plans, and many customers find it easier to file successful claims with these providers than with Chase’s Benefits Administrator. However, most annual plans won’t work for JT and I because we oftentimes don’t return to our official residence frequently enough to be covered.
In the end, deciding whether to purchase travel insurance or rely on credit card protections is a personal decision that depends on various factors. Check out our story on when to buy travel insurance versus when to rely on credit card protections for a deeper analysis.
If we purchased an annual multi-trip travel insurance policy, we’d likely buy the AllTrips Premier plan from Allianz for $450 per year. Note that the plan’s cost and details vary depending on your state of residence. The following table shows results for a Florida resident:
|Chase Sapphire Reserve||Allianz AllTrips Premier (Florida resident)|
|Trip cancellation/interruption||$10,000 per trip||$2,000 per year|
|Emergency medical||$2,500 with a $50 deductible||$50,000 per trip per insured|
|Emergency transportation||$100,000||$500,000 per trip per insured|
|Baggage loss/damage||$3,000 per person||$2,000 per trip per insured|
|Baggage delay||$100 per day for up to five days when delayed at least six hours||$2,000 per trip per insured when delayed at least 12 hours|
|Trip delay||$500 per ticket when delayed at least six hours or overnight||$300 per day when delayed at least six hours (up to $1,500 per trip per insured)|
|Rental car damage and theft coverage||$75,000||$45,000 per trip ($9 extra per day)|
|Travel accident coverage||$1,000,000 common carrier loss of life, $100,000 24 hour loss of life||$50,000 per trip per insured|
As you can see, the coverage offered is different. If you have medical insurance that will provide coverage while you’re traveling, you may find your money is better used toward paying the annual fee on the Chase Sapphire Reserve than on purchasing travel insurance. Besides the benefits that may effectively eliminate your need for travel insurance on most trips, you’ll also get many other excellent perks and you’ll earn valuable Chase Ultimate Rewards points on all your purchases.
Apply now for the Chase Sapphire Reserve.
For rates and fees of the Platinum Card, please click here.
Featured photo by Austin Neill/Unsplash.
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