Here's why I buy an annual travel insurance policy, even though my credit cards offer travel protections
Chances are you have a credit card that offers some type of travel insurance or trip protection. This could be for benefits like trip delay reimbursement or lost luggage insurance. With these protections, purchasing a travel insurance policy may seem unnecessary.
When I first got into the world of credit card points and miles, I thought, "I'm never buying travel insurance again because my credit cards cover it!"
So why do I buy an annual travel insurance policy for myself and my wife? Isn't that an unnecessary expense? Here's why I buy an annual travel insurance plan, even though my credit cards offer numerous trip protections.
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What is travel insurance?
Before we understand which credit cards offer travel insurance benefits and why I carry an annual travel insurance policy, let's understand what travel insurance is (and is not).
Travel insurance is a catch-all term for a policy that covers you against financial losses during travel. This could include things such as lost property, lost money from accidents or delays, unforeseen medical bills and even serious injuries — or accidental death.
Policies vary in what they cover, when the coverage becomes active, which events trigger your policy's coverage and other intricacies. There's also an add-on "cancel for any reason" insurance on some policies.
An overview of travel protections on popular credit cards
Before we talk about why I carry an annual travel insurance policy, let's look at some popular travel credit cards to see what protections they offer. We can then use this to see what they don't cover, as well as to understand when coverage is and isn't in effect.
Here are four popular travel credit cards and the coverage they provide for travel mishaps:
|Capital One Venture X Rewards Credit Card||Chase Sapphire Preferred Card||Chase Sapphire Reserve||The Platinum Card® from American Express|
|Trip cancellation reimbursement for lost money||Up to $2,000 per person for you and immediate family members for prepaid, nonrefundable tickets.||Up to $10,000 per person and $20,000 per trip for your pre-paid, nonrefundable travel.||Up to $10,000 per person and $20,000 per trip for your pre-paid, nonrefundable travel.||Up to a maximum of $10,000 per covered trip and a maximum of $20,000 per eligible card in a 12-month period.*|
|Trip delay coverage for extra expenses||Up to $500 per person for reasonable expenses like hotel rooms, food, toiletries or clothes when your flight is delayed overnight or by six hours or more.||Up to $500 per person for non-reimbursed expenses like meals and lodging when your flight is delayed overnight or by 12 hours or more.||Up to $500 per person for non-reimbursed expenses like meals and lodging when your flight is delayed overnight or by six hours or more.||Up to $500 per covered trip that is delayed for more than six hours, capped at two claims per eligible card per 12 consecutive months.*|
|Emergency medical evacuation||Can facilitate but you will still pay for it.||Can facilitate but you will still pay for it.||Up to $100,000 in emergency evacuation coverage, but it must be coordinated by the benefits administrator to be covered.||If approved and coordinated by the Premium Global Assist Hotline, assistance may be provided at no cost to you.**|
|Lost or delayed luggage||Lost luggage covered; delayed luggage not covered.||Both are included.||Both are included.||Lost luggage covered; delayed luggage not covered.***|
|Emergency medical / dental coverage||Not included.||Not included.||Up to $2,500, subject to a $50 deductible. Up to $75 per day for up to 5 days for a hotel room after a hospital stay.||Not included.|
|Accidental death / dismemberment reimbursement||Up to $1 million dollars.||Up to $500,000 dollars.||Up to $1 million dollars.||None. (Benefit removed in 2020.)|
|Requires paying for full trip on this card to activate benefits?||Some benefits, yes.||Only requires paying part of the trip on the card.||Only requires paying part of the trip on the card.||Some benefits, yes.|
|Link to benefits guide||Here.||Here.||Here.||Here and here.|
*Eligibility and benefit level varies by card. Terms, conditions and limitations apply. Visit americanexpress.com/benefitsguide for details. Policies are underwritten by New Hampshire Insurance Company, an AIG Company.
**Eligibility and benefit level varies by card. Terms, conditions and limitations apply. Visit americanexpress.com/benefitsguide for details. Cardmembers are
responsible for the costs charged by third-party service providers.
***Eligibility and benefit level varies by card. Terms, conditions and limitations apply. Visit americanexpress.com/benefitsguide for details. Policies are underwritten by AMEX Assurance Company.
Related: The 9 best credit cards with travel insurance
Analyzing the gaps: What credit cards don't cover
From the chart above, the list of travel protections and trip insurance provided by credit cards appears quite robust at first. Unfortunately, there are parts of your upcoming trip that may not be covered by your credit card's travel protections — which is why I carry an annual travel insurance policy. Let's look at what isn't covered by your credit card travel insurance because some of this information may surprise you.
Firstly, your credit card protections won't apply if you don't pay for your trip with that particular credit card. Simply having the Chase Sapphire Reserve in your wallet won't help you during a delay on your next vacation unless you pay for at least part of the trip with that card. While that sounds easy enough, those of us who hold many credit cards and constantly open new cards to earn sign-up bonuses often put our expenses on those newer cards instead of the card with the best protections.
Related: Should you get travel insurance if you have credit card protection?
Moreover, if you have many credit cards, it could be quite difficult to remember exactly which expenses you paid for with which card when you're in an urgent situation. However, you'll need to know that information to understand which benefits are available to you at that critical moment.
Additionally, many credit cards do not cover illness and hospitalization. If you become ill and need to spend a few nights in a hospital — such as when I got malaria in Tanzania in January 2021 and then needed another week of recuperation at a hotel before I was able to fly home — credit card travel insurance could leave you footing the bill.
Speaking of bills you don't want to hold, consider that emergency medical evacuation may not be covered by your credit card. If you're hiking in a remote area and have a bad fall, the average cost of medical evacuation by helicopter is over $30,000, according to the American Journal of Managed Care. Two credit cards may cover this: the Chase Sapphire Reserve and Amex Platinum. However, it must be coordinated by your benefits administrator — not by you calling the service provider yourself — or you will be stuck with the bill.
Lastly, there are multiple exclusions for what's not covered by most credit card travel insurance policies:
- Expenses from coronavirus-related illness or quarantine.
- Preexisting conditions that lead to problems during your trip.
- Any injuries related to adventure activities such as scuba diving, skiing or snowboarding during your trip.
See also: Why you might actually need road trip travel insurance
It's also worth pointing out that none of these policies will reimburse the points and miles you lose along the way from canceled trips. If you want to splurge and cover the fees for re-depositing your points and miles after canceled trips, you can do that with some annual travel insurance plans. Allianz features this on its All Trips Executive plan. You won't find this option with credit card travel insurance. With credit card protection, only your out-of-pocket cash losses are covered.
Why I buy an annual travel insurance policy
I currently have 26 credit cards. I'm of the mentality that you should always be opening a new credit card and working on the sign-up bonus. This means the trips I'm planning for this year probably aren't paid for with my best credit card for flights but rather with a new credit card, helping me earn bonus points from a welcome offer.
The advantage to this is earning lots of extra points and miles while not worrying about what credit card I'm using for my spending. The downside is that my credit card's travel protections likely aren't in effect. When buying an annual travel insurance policy, I don't need to worry about which credit cards I'm using when making reservations for an upcoming trip.
Related: Points of View: Does paying the taxes and fees on award flights trigger trip protections?
I also take a yearly snowboarding trip and a yearly scuba diving trip with my wife. Neither of these activities would be covered by credit card travel insurance. My three nights in a hospital in Arusha, Tanzania, last year also fell outside the coverage offered by credit card travel insurance. Evacuation coverage is important for those "just in case" situations.
Lastly, I visited several countries that required proof of health insurance as part of their COVID-19 protocols. My annual travel insurance policy met this requirement; credit card insurance wouldn't cover it though, so you would need to purchase an additional health plan if your standard health insurance policy didn't meet the requirements.
Related: TPG’s comprehensive guide to independent travel insurance — including coronavirus coverage
For me, purchasing an annual travel insurance policy makes sense. That's after considering what's covered, what isn't covered and the fact I often don't use the best card with the best coverage to pay for my trips (because I'm putting my spending on a new credit card for a new sign-up bonus). Plus, carrying an annual policy is cheaper than buying per-trip policies every time I leave home.
Related: All you need to know about annual travel insurance policies
No two people's lives are the same, and neither are their travel needs. For me, it makes sense to buy an annual travel insurance policy for me and my wife, even though we have numerous credit cards that offer various travel protections.
Consider the limitations on coverage that your credit card offers and how the coverage goes into effect before getting a separate travel insurance policy. Rather than purchasing a new plan for each trip, you can save money by taking out an annual plan each year.
- TPG’s comprehensive guide to independent travel insurance — including coronavirus coverage
- Everything you need to know about cancel for any reason trip protection
- 6 truths and myths about ‘cancel for any reason’ travel insurance
- 7 things to look out for when buying travel insurance, according to an expert
- The best travel insurance policies and providers
For Capital One products listed on this page, some of the above benefits are provided by Visa® or Mastercard® and may vary by product. See the respective Guide to Benefits for details, as terms and exclusions apply