Built-In Trip Coverage When Paying With Miles and Points

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Earlier this week I wrote about trip delay and cancellation coverage that is available as a built-in protection via many (but not all) premium rewards credit cards. One of the questions that came up in that post was how this automatic coverage applies when you use an eligible credit card to pay for the taxes/fees associated with an award trip where you paid the bulk of the purchase price using airline miles or credit card points.

As always, the details of how this plays out is going to depend greatly on your exact situation, but I wanted to at least give one example where you would be eligible for trip delay/cancellation coverage thanks to your credit card even if you were traveling using miles/points to cover the bulk of your expenses.

The Chase Sapphire Preferred® Card specifically addresses this situation in their Benefits Guide:

"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. If the monetary value of the redemption does not appear on the Insured Person's itinerary or redemption confirmation issued by the Common Carrier, Rewards program manager, Tour Operator, Travel Agency, or Travel Supplier the Company will reimburse the Insured Person ($.01) per point redeemed up to the Insured Person's 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

Rewards means points, miles, cash Rewards, or any other type of redeemable Rewards, provided that all Rewards have been accumulated through use of a Rewards program sponsored by Chase Bank USA, N.A. and/or its affiliates.

I'll circle back to what that means in reality in a moment, but I want to first point out that this coverage of award trips is not the case with all premium rewards cards. For example, while they offer some other really good protections, in this case Citibank specifically calls out "travel booked using American Airlines AAdvantage miles" and/or when "travel is free because you use travel awards, such as airline points, vouchers, or free companion tickets" as reasons to not provide some of their normally standard travel protections.

I have (thankfully) not had to use built-in travel protections yet while flying on miles and points, but I have read/heard a few stories of those who have. So, the way I read the Chase Sapphire Preferred Benefit's Guide and interpret the stories I have heard, your trip isn't disqualified from coverage just because you paid for some of it using miles and points. However, those miles and points need to have originated from a "rewards program sponsored by Chase Bank". To me that would mean if you used Ultimate Reward points as cash to book the trip, or if you transferred points to a hotel or airline partner you should be fine based on my reading of the terms since the miles were accumulated through a Chase Rewards program. Theoretically using a card like the United MileagePlus® Explorer Card to earn your United miles should be fine, too.

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Here is a good example of how this played out in the real world when a trip booked primarily using Ultimate Reward points suffered an unexpected two day travel delay back from Jamaica thanks to weather in the United States. In that case since they paid the taxes on an eligible card they were reimbursed the extra two nights of hotel and meals totaling over $500.

I know full well that with the amount of travel we do it is only a matter of time before we hit delays/cancellations that are severe enough to cost us real money. That's why we try and pay attention to the coverage our rewards credit cards provide and choose the one to pay for tickets/taxes that best aligns to what we think we might need for that trip. When we are using Ultimate Rewards points or a type of mile that has been accumulated via a Chase product, we often try and pay the taxes with a card like the Chase Sapphire Preferred® Card to not only earn 2x on travel, but also to help cover our tails in case something goes wrong along the way.

Have you had to use trip delay or interruption coverage on an award ticket? How did it go?