Understanding Credit Card Insurance Protection

Understanding Credit Card Insurance Protection article image.

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Credit cards can help you manage your money, finance big purchases and earn rewards like travel points and cash back. But did you know they may also provide insurance? Some credit cards offer insurance protection for different situations, such as reimbursing you for qualifying travel cancellations or extending the manufacturer's warranty on products purchased with the card.

Until recently, credit card insurance protections were fairly common. In the past few years, however, many credit card issuers have curtailed insurance coverage from their cardholder benefits. But credit cards with insurance are still out there, even if they're now a little harder to find.

Types of Credit Card Insurance

Credit card insurance typically covers either product purchases or travel-related purchases. Here's a closer look at the kinds of credit card insurance you may find.

Product Purchases

  • Return protection coverage: If you make a purchase and want to return it after the return period has passed, you'd normally be out of luck. Some credit cards offer return protection coverage, so you may be able to get a refund for the purchase after all.
  • Purchase protection: If a product you bought with the card is damaged, stolen or lost within a certain time frame (typically a few months), this coverage can reimburse you for the purchase price. You may need to show a police report or proof that you made a claim with your primary insurer first before you can tap this coverage.
  • Price protection: You buy the TV you've been wanting and then see it advertised for $100 off the next week. Some retailers do price adjustments in this situation, but many don't—and if the lower-priced product is at another retailer, you're out of luck. Credit cards that offer price protection may refund the difference in price.
  • Extended warranties: Buying a product with the right credit card can protect you if it breaks after the manufacturer's warranty expires. Some cards offer extended warranty protection, which may either replace the item or reimburse you for the cost.
  • Cellphone protection: With smartphone prices surpassing $1,000, wouldn't it be nice to know you're covered if your phone is damaged or stolen? Pay for your cell plan with a credit card that offers cellphone protection, and you may be reimbursed for damage or theft of your phone.

Travel-Related Purchases

  • Rental car collision insurance: If you've ever rented a car, you know the insurance that rental companies try to sell you can really add up. Pay for the rental with a credit card that offers rental car collision insurance, and you can just say no to pricey add-on insurance. Be aware this only covers damage to the car, not medical or legal costs, and may require you to go through your own car insurance policy first.
  • Travel accident insurance: Also called accidental death and dismemberment insurance, this may cover medical expenses or loss of life if you or a travel companion are injured or killed on a trip you paid for with the card.
  • Trip cancellation insurance: When your travel plans fall through due to certain events out of your control, trip cancellation insurance can ease the pain. Generally, this insurance covers nonrefundable prepaid travel purchases made with the card. Covered cancellation causes could include accidental injury, sickness or death of the cardholder, a traveling companion or an immediate family member; or severe weather that causes the trip's cancellation. You may even be covered for travel cancelled due to COVID-19. However, exclusions and limitations vary widely from card to card, so confirm exactly what your card covers before you booking your trip or filing a claim.
  • Trip delay insurance: If a trip you paid for with the card is delayed by a canceled flight, bad weather, lost passport or other covered causes, trip delay coverage can reimburse you for the resulting expenses. For instance, if you have to stay an extra night in town to catch a flight the next day, the insurance could pay your meal, transportation and lodging costs.
  • Baggage delay insurance: Sometimes you arrive on time, but your luggage doesn't. Baggage delay insurance can reimburse you for clothing and toiletry purchases made to tide you over while bags are missing.

How to Get the Most Out of Your Credit Card's Insurance Policy

If your credit card offers insurance policies, read your cardholder agreement carefully to understand what is covered by the insurance and what isn't. Most policies have exclusions and limitations on coverage.

For example, your card's insurance may cover a stolen cellphone but not a lost one. Understanding details such as how quickly claims must be made and what reimbursement limits apply can save you pain down the road. If you're in doubt about any aspect of your insurance coverage, contact the credit card issuer for clarification.

You should also keep records of all of your purchases made with the card, including any receipts, warranties or other documentation. You may need this information to make a claim.

Once you understand the specifics of your coverage, you can plan purchases to maximize any insurance your card offers. For instance, you can pay your cellphone bills with a card that offers cellphone protection or make travel arrangements with a card that offers travel protection.

Credit Cards With the Best Insurance Offerings

Here are a few credit cards that offer insurance plus some other appealing perks.

  • Chase Sapphire Preferred® Card: You don't have to be a world traveler to benefit from the Chase Sapphire Preferred® Card. This card offers trip delay insurance, baggage reimbursement of up to $3,000 per person per trip for lost luggage, trip cancellation and interruption insurance of up to $20,000 per trip or $40,000 per year, and rental car insurance. The card also offers solid travel and dining rewards with flexible redemption options. Whether at home or on the road, you'll also enjoy an extra year's warranty and purchase protection up to $500 that covers theft and damage on qualifying purchases within 120 days of purchase. The APR is 15.99% to 22.99% variable depending on your credit. The annual fee is $95.
  • Capital One Venture Rewards Credit Card: Another option is the Capital One Venture Rewards Credit Card. Earn a one-time intro bonus of 60,000 miles once you spend $3,000 on purchases within 3 months, plus unlimited 2 miles per dollar on every purchase. There's a $95 annual fee and a variable APR of 15.99% to 23.99% depending on your credit.
    On the road, you'll appreciate the rental car collision insurance, 24-hour travel assistance to replace a lost or stolen card, and travel accident insurance that kicks in automatically when you use the card to purchase your fare. The card also includes an appealing purchase-related protection in the form of an extended warranty on eligible items. You'll also have access to concerts, sporting events and premier dining experiences, as well as online shopping tools Paribus and Wikibuy, which help you find the best prices on online purchases.
  • Wells Fargo Visa Signature® Card: Even before you consider the insurance features, there's a lot to like about this card: no annual fee, flexible rewards points and a 0% introductory APR on purchases and balance transfers for 15 months. (After that, your APR will be 12.49% to 25.49% variable.) The Wells Fargo Visa Signature® Card also boasts plenty of insurance benefits, including trip cancellation insurance, lost luggage reimbursement, 24/7 travel and emergency assistance, roadside dispatch service and rental car collision coverage. Travel confidently with up to $1 million in coverage for accidents while on a plane, ship or train trip paid for with your card.
    You can shop confidently, too, with purchase protection for the first 90 days, price protection for 60 days, and one year of extended warranty protection on eligible purchases. The Wells Fargo Visa Signature Card includes cellphone insurance and 24/7 concierge services.

Additional Credit Card Perks

In addition to insurance features, many credit cards offer other perks you may not be aware of. These include:

  • Emergency travel assistance: If you get sick, injured or involved in a legal tangle on a trip, many credit cards provide emergency travel assistance. This can include medical, legal and transportation assistance or referrals; help replacing lost eyeglasses, passports or prescriptions; or even getting messages to your family in an emergency.
  • Roadside assistance: If your car or rental car runs out of gas or breaks down on the road, your credit card may offer roadside assistance to help. Some roadside assistance programs just send help; others also cover some or all of what it costs to help you out.
  • Access to special events: Some credit cards give you access to preferred seating or presale tickets for concerts, sporting events, plays or elite experiences such as gourmet food or wine tastings.
  • Concierge services: If your life is hectic, a credit card that includes concierge services can help. Concierge services can assist in planning trips, score you reservations at hot-spot restaurants or tickets to events, and even help buy and ship birthday gifts.
  • ShopRunner membership: If you frequently shop online, you'll appreciate a credit card that gives you complimentary membership to ShopRunner. Normally $79 annually, this service offers unlimited free two-day shipping, free return shipping, discounts and more.

Do You Need a Credit Card With Insurance?

Insurance benefits alone aren't a reason to choose one credit card over another. However, insurance can be a valuable perk, especially if you travel frequently and would like a little peace of mind when planning a trip. Looking for credit cards with travel and purchase insurance coverage can take a bit of legwork, but if you ever need to make a claim, the rewards can be worth the effort.

Keep in mind that most credit cards with insurance require good to excellent credit. If you're not sure where your credit stands, check your credit report and score. To be paired with credit cards based on your unique credit profile, check out Experian CreditMatch™.

All information about the Wells Fargo Visa Signature® Card has been collected independently by Experian and has not been reviewed or provided by the issuer of the card.

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