How travel insurance through a credit card works

Kicking yourself for not spending a little bit extra on travel insurance for your next trip? You may already have it.

As it turns out, some credit cards — particularly travel credit cards — automatically come with travel insurance coverage. When you use a card with built-in coverage to book a trip, you may be able to get reimbursed in the event of cancellations, delays or interruptions; for instance, if you find out that your flight home for Thanksgiving is now not slated to land until well after the turkey dinner.

What does credit card travel insurance cover?

Travel insurance through credit cards will typically offer reimbursement “for a trip cancellation, delayed or lost luggage, rental car insurance and other travel-related expenses,” said CNBC Select. Medical-related incidents, like treatment or an evacuation, are also commonly covered.

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However, the types and amount of coverage you get can vary widely. “With a higher annual fee, you’ll typically get more types of coverage and higher coverage amounts,” said NerdWallet. Almost across the board, though, the rule of thumb is that you have to have used the card with the coverage to pay for the trip to take advantage of it. Additionally, “most credit card travel insurance is secondary insurance: If your luggage is stolen, you have to file a claim with your homeowners insurance provider before your card company will pay out,” said CNBC Select.

How does credit card travel insurance compare to a standalone policy?

The major differences between the travel insurance offered through a credit card and a standalone travel insurance policy come down to cost and the amount and types of coverage provided. While you do typically have to use the card to pay for your trip costs, you will generally not face any additional costs to take advantage of the perk. For a standalone policy, however, you will probably pay “between 4% and 8% of a trip’s total value,” said CNBC Select.

Standalone policies tend to be much more comprehensive in the coverage they provide. With credit card coverage, there may be some notable exclusions. For instance, “most credit card trip interruption and cancellation insurance benefits exclude cancellations or interruptions caused by a sudden recurrence of a preexisting condition,” said The Points Guy, a credit card blog. Another thing commonly excluded are “adventure sports like base jumping, sky diving, free soloing, diving, mountaineering and paragliding.”

How can you make use of your card’s travel insurance coverage?

If you want to fall back on your card’s travel insurance for an upcoming trip, make sure to read the fine print first. “Some benefits require you to enroll — and virtually all require a formal claim process, with no reimbursement guarantee,” said The Points Guy.

Hang onto any receipts along the way, as you will likely need to provide them to file a claim. The same goes for “key documentation such as showing how a loss occurred, correspondence with travel providers proving they won’t reimburse you, doctors’ notes, police reports or any other applicable paperwork,” said Bankrate.

Keep in mind that you must submit your claim within a certain timeframe, usually “less than 60 days,” said Bankrate. You will “download a claim form from the credit card provider’s website and submit evidence of the losses or situations for which you’re seeking reimbursement,” after which your credit card provider will get in touch with their decision.