What is Credit Card Travel Insurance? 

Jack Prenter, Founder of Dollarwise

For all intents and purposes, credit card travel insurance is virtually the same as regular travel insurance. The main differences between the two are usually the terms and conditions. 

While these two types of insurance may be the same at first glance, there are a few differences that should be understood. As a Canadian, you should consider travel insurance whenever you’re going somewhere as it may save you from having to pay massive health care costs in other countries. 

So, what exactly does getting credit card travel insurance entail?

Definition of credit card travel insurance

Credit card travel insurance is a feature provided by certain credit cards, offering coverage for unexpected expenses during travels. It typically covers expenses related to trip cancellations, interruptions, baggage loss, and sometimes medical emergencies. 

Unlike regular travel insurance bought separately, credit card travel insurance is normally automatically activated when you use the eligible card to pay for travel expenses, such as flights or accommodations. Activation thresholds differ by card, but can typically require the majority of travel expenses to be charged to the card.

While regular travel insurance offers more customization and broader coverage options, credit card travel insurance often has limitations regarding coverage depth and trip duration.

Types of credit card travel insurance

  • Travel Medical Insurance: This type of coverage focuses primarily on medical emergencies during travels.

    It may cover expenses related to sudden illnesses or injuries abroad, including hospital stays, doctor visits, and medical evacuations. Keep in mind that coverage limits and pre-existing condition clauses may apply.
  • Trip Protection: Trip protection covers various facets of travel, including trip cancellations, interruptions, or delays due to unforeseen circumstances like severe weather.

    It may also cover lost baggage, flight accidents, or rental car damage. However, coverage varies among credit cards, so it’s crucial to review each card issuer’s specific terms.

A couple of things to note:

  • Some credit cards come with both trip protection and travel medical insurance. 
  • If your card comes with travel medical insurance, you’ll get it no matter what happens. However, when it comes to trip protection, you may be required to spend a specific amount to pay for your trip or hotel for the policy to activate. 

Coverage details of credit card travel insurance

When it comes to credit card travel insurance, understanding the specific coverages offered is crucial for Canadians planning their trips. 

Here’s a detailed breakdown of what credit card travel insurance typically covers:

  1. Travel Medical Insurance: Credit card travel insurance often includes coverage for emergency medical expenses while abroad. However, coverage might have limitations regarding pre-existing medical conditions and may require payment using the credit card providing the insurance.
  2. Trip Cancellation/Interruption: This coverage typically reimburses non-refundable expenses if you need to cancel or interrupt your trip due to covered reasons. These reasons may include illness, severe weather, or other unforeseen circumstances.
  3. Flight/Trip Delay: Credit card travel insurance may offer compensation for expenses caused by flight or trip delays, such as meals and accommodations. Be aware of the time thresholds and coverage limits associated with these delays.
  4. Delayed and Lost Baggage: If your checked baggage is delayed or lost during your travels, credit card travel insurance might cover expenses for essential items or provide reimbursement for the lost belongings. There may be limitations on the maximum reimbursement amount per item or per trip.
  5. Common Carrier Travel Accident: In unfortunate events like accidents or fatalities while traveling on common carriers like planes, trains, or buses, some credit card travel insurance policies offer coverage. This coverage typically provides financial assistance to the cardholder or their beneficiaries.
  6. Car Rental Collision/Loss Damage: When you rent a car using a credit card offering insurance, coverage for collision damage or theft may be included. However, certain vehicle types or countries might be excluded from this coverage.
  7. Hotel/Motel Burglary: In instances of theft or burglary at your hotel or motel, credit card travel insurance might cover the loss or damage to your belongings. Check the policy to understand the specific requirements for this coverage.

Understanding the nuances of these coverages is vital for maximizing the benefits provided by credit card travel insurance. Always review your credit card’s terms and conditions to comprehend the scope of coverage and any limitations or exclusions that may apply.

Here are a couple of offers that come with some popular credit cards in Canada:

BMO Air Miles World Elite Mastercard:

  • Extended Warranty – 1 Year
  • Travel Accident – $500,000
  • Trip Cancellation – $2,500
  • Trip Interruption – $2,000
  • Emergency Medical – 15 Days
  • Flight Delay – $500
  • Baggage Delay – $200
  • Stolen or Lost Baggage – $750
  • Hotel/Motel Burglary – $750
  • Personal Effects – $750
  • Rental Car Accident – $200,000
  • Rental Car Personal Effects – $1,000

TD Aeroplan Visa Infinite Card:

  • Purchase Security – 90 Days (up to a year with valid manufacturer warranty)
  • Extended Warranty – 90 Days (up to a year with valid manufacturer warranty)
  • Mobile Phone/Tablet – $1,000
  • Emergency Medical – 21 Days
  • Trip Cancellation – $1,500
  • Trip Interruption – $5,000
  • Flight Delay – $500
  • Delayed, Stolen, or Lost Baggage – $1,000
  • Hotel/Motel Burglary – Up to $2,500
  • Rental Car Accident – Up to 48 consecutive days
  • Common Carrier Travel Accident – Up to $500,000

Policy details and conditions

Policy details within credit card travel insurance are essential to grasp for Canadians planning their trips. These details often contain specific requirements and conditions that must be met to activate or maintain coverage. For instance:

  • Car Rental Insurance Requirement: To benefit from car rental collision/loss damage coverage, the entire rental amount is typically required to be charged to the credit card offering the insurance. This means paying for the entire rental, including taxes and fees, using the eligible credit card.
  • Trip Purchase Requirement: Many credit cards stipulate that travel expenses, such as flights or accommodations, must be purchased using the credit card providing the insurance to activate coverage.
  • Pre-existing Conditions Exclusions: Credit card travel insurance often excludes coverage for pre-existing medical conditions. Understanding the policy’s stance on pre-existing conditions is crucial to avoid complications in case of medical emergencies during travels.

Coverage duration for credit card travel insurance

The length of coverage offered by credit card travel insurance is an important consideration, especially for longer trips or extended stays. Key points to consider include:

  • Coverage Duration: Credit card travel insurance typically covers trips up to a specified duration. This duration varies among credit cards and may range from 7 to 15 days or longer. It’s vital to check the maximum coverage period provided by your credit card to ensure your trip falls within this timeframe.
  • Need for Supplemental Insurance: For trips exceeding the maximum coverage period offered by credit card travel insurance, supplemental insurance may be necessary. Extended trips may require additional travel insurance to cover the entirety of the journey and ensure continuous protection against unforeseen circumstances.

Credit cards offering travel insurance

Only certain credit cards offer travel insurance and the best way to check whether yours has it is by visiting your card issuer’s website or checking your cardholder benefits guide. 

In most cases, travel rewards credit cards will generally come equipped with some form of travel insurance. High-tier travel credit cards come with expansive travel insurance options, including both trip protection and travel medical insurance. 

Some cards that include travel insurance are:

  • CIBC Aventura Visa Infinite Card
  • TD Aeroplan Visa Infinite Card
  • RBC Avion Visa Infinite
  • American Express Cobalt Credit Card
  • Scotiabank Gold American Express Card
  • HSBC World Elite Mastercard
  • Scotiabank Passport Visa Infinite Card
  • MBNA Rewards Platinum Plus Mastercard
  • Scotiabank American Express Card
  • RBC ION Visa Card

Comparing and choosing the right credit card for travel insurance

When it comes to selecting a credit card offering travel insurance benefits, you have a multitude of options. However, making the right choice requires a thoughtful approach. Here’s a guide to help you navigate this decision-making process effectively.

Key questions to ask yourself before choosing 

  • What Type of Coverage Do I Need?
    • Assess your travel habits and preferences to determine which coverage aspects are essential for your trips. Are you primarily concerned about medical emergencies, trip cancellations, or lost baggage? Or perhaps you’re concerned about everything?
  • What Are the Coverage Limits and Exclusions?
    • Check the credit card’s policy for coverage limits, exclusions, and any conditions that may affect your specific situation. Pay attention to limitations on pre-existing conditions and maximum coverage durations.
  • Is the Annual Fee Justified by the Travel Benefits?
    • Evaluate whether the benefits provided by the credit card, including travel insurance perks, justify the annual fee.
  • Does the Credit Card Align With My Spending Patterns?
    • Consider how your credit card usage aligns with the eligibility criteria for activating travel insurance. For instance, do you use the card for travel-related expenses?
  • Are There Additional Benefits Beyond Travel Insurance?
    • Look beyond travel insurance and explore other benefits offered by the credit card, such as rewards, sign-up bonuses, or additional travel perks like airport lounge access.
  • What is the Claim Process Like?
    • Understand the procedure for filing claims and the ease of the process. A straightforward and efficient claims process can significantly impact your experience in case of emergencies.

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