Depending on your spending habits and risk aversion, credit card insurance might be beneficial. It might even be offered as a perk with one of your existing credit cards. Keep reading to learn more about some of the most important types of credit card insurance.
Trip cancellation/trip interruption insurance
Trip cancellation or trip interruption insurance is a type of credit card insurance that most commonly comes with travel credit cards. This type of insurance protects you if you need to cancel a trip before it begins or return home earlier than originally scheduled. With this type of insurance, your insurance company might reimburse you for the cost of your itinerary change. Almost all trip cancellation insurance policies have a policy limit or cap on the amount of money you can claim. Therefore, you should only file a claim if you have a qualifying reason for having to cancel your trip or return home early, such as the death of a family member or job loss. It’s also important to note that in most cases, you will only qualify for trip cancellation/interruption insurance if you charged all or part of your travel expenses to your credit card. Expenses can include flights, rental cars, hotel stays, and more. To find out the exact requirements and coverage limits, read your policy carefully.
Travel medical insurance
Another type of credit card insurance, often offered with travel credit cards, is travel medical insurance. Travel medical insurance protects you from the expensive costs of having to receive medical care in another country. If your credit card comes with travel medical insurance and you find yourself in need of healthcare while travelling, your medical expenses will likely be covered up to a certain amount.
Keep in mind that not all travel medical insurance policies are created equal. They also tend to have many exclusions. Some policies may only cover trips of certain lengths, certain destinations, or people of certain ages. For example, older travellers may only receive three days of coverage compared to 15 days for a younger traveler.
Mobile device insurance
Mobile device insurance is another type of insurance credit card holders might have access to. This type of insurance covers damage, theft, and loss related to smartphones and tablets. For mobile device insurance coverage to apply, you will need to charge the full amount of the device to the credit card that you get insurance through. If you did not buy the device outright (e.g. you bought a cell phone using a monthly payment plan), your payment installments must be charged to the credit card that you have mobile device insurance through. Like other types of insurance, there is a coverage limit for mobile device insurance.
Rental car insurance
One final type of insurance that may come with your credit card is rental car insurance. Having insurance is required to rent a car in most countries, including Canada. This means that if you don’t already have your own insurance, you must purchase insurance. Although rental car companies almost always offer their own insurance plans, you can decline their plans if you have rental car insurance through your credit card. So long as you pay for the rental car with your credit card, you will be covered.
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