Why Should I Buy Travel Insurance When My Credit Card Covers It?
My credit card company sent me a new card that promises me 3 times the amount of frequent flyer miles on my credit card purchases. I like to fly so that sounded like a good deal. Overlooking the fact that I have to pay an annual fee to get these miles and the credit limit was lowered, I went ahead and signed up for the card.
So I am looking at the Travel Benefits my card gives me and the question becomes obvious: why would I need to purchase additional travel insurance?
Here are my benefits:
- travel and emergency assistance
- auto rental collision damage waiver
- lost luggage reimbursement
- travel accident insurance
- concierge service
- roadside dispatch
- signature dining
Remember that these benefits are only applicable if you use your credit card for the purchase of all your travel needs. So if you use cash to pay for a taxi upon exiting the airport, and you get injured in an accident, you will not be covered.
SIMILARITIES between credit card travel benefits and travel insurance
Lost Luggage Reimbursement. This type of insurance reimburses you up to a certain limit per trip for loss or damage to either your checked or carry-on luggage. However, always read the exclusions section. Not all loss or damage is covered or covered adequately. For example, on my Visa card travelers get reimbursed only $200 for any furs or jewelry lost or stolen. The best advice is to leave expensive items at home, and to read the exclusions for what will and will not be covered.
Travel Accident Insurance. This covers you for “accidental death and dismemberment,” more commonly referred to as AD&D coverage. This is what it covers: “Any accidental injury that is the sole cause of accidental loss of life, limb, sight, speech or hearing while riding as a passenger in, entering or exiting any Common Carrier,” as well as covering you while you are in the airport and in the airplane. Note that this insurance covers you only if you are riding to or from the airport or other travel terminals, such as bus or train.
DIFFERENCES between credit card travel benefits and travel insurance
There are significant differences.
When the credit card company says it covers travel and emergency assistance, note carefully the word “assistance.” They assist by providing services only, not financial benefits.
So, what is missing in card services that is covered in purchased travel insurance?
Medical coverage and Medical Evacuation. Purchased travel insurance will finance all your medical related expenditures on your trip, including exorbitantly expensive medical or political evacuation costs.
Repatriation of Remains. This sounds grim, but if you should die on your trip, your family will want to have your remains brought home.
Trip Cancellation and Trip Interruption. This is a nice benefit of travel insurance and covers financial reimbursement for costs related to cancellation and interruption, such as hotel bill or re-issuing of a new travel ticket. Check with your insurance company for benefits and exclusions.
Terrorism. Certain companies will cover you in any country, regardless of location and regardless of whether or not the US government has issued a travel advisory. There is no added cost for this coverage.