Why take out travel insurance? You may already be covered.

Since many countries still require negative COVID-19 tests to enter, it’s a good idea to get travel insurance. After all, a positive COVID-19 test result is still possible — even if you’re vaccinated and boosted — and could derail your trip.

More and more Americans are jumping on the travel insurance bandwagon. Nearly a third (31%) of U.S. travelers say they are more likely to purchase travel insurance for their planned trips by the end of 2022, according to an August 2021 AAA survey of more than 1,100 U.S. adults. And Americans follow through on what they say they will do. AAA’s travel insurance sales increased between August 2020 and August 2021.

But chances are you can get travel protections without buying a separate travel insurance policy. Indeed, many credit cards offer travel insurance as a built-in benefit to customers.

Credit card travel insurance is comparable to standard travel insurance, which you purchase from a typical travel insurance company, such as Allianz or World Nomads.

But whereas standard travel insurance requires you to purchase a plan, your credit card’s travel insurance provides automatic coverage — as long as you pay for the trip with a card that offers the benefit.

Standard travel insurance typically costs between 5% and 10% of your total trip cost, according to insurance comparison site Squaremouth. However, the exact costs vary depending on factors such as your age, type of trip, duration and expenses. With credit card travel insurance, the type of insurance coverage and the maximum amount covered may vary.

In general, expect coverage between $6,000 and $20,000 per trip among cards with trip cancellation and trip interruption benefits. For other types of coverage, like baggage delay, it’s usually less expensive. For example, baggage loss insurance of up to $3,000 per passenger is standard, and travel accident insurance typically covers between $500,000 and $1 million.

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What does credit card travel insurance cover?

Travel insurance is a broad umbrella term, and some credit cards offer more coverage than others. For example, cards with higher annual fees tend to offer more coverage with higher dollar values.

Common types of credit card travel insurance coverage are:

  • Baggage delay. If your checked baggage does not show up at the carousel, this coverage will reimburse you for necessities such as clothing, toiletries, etc.
  • Lost/damaged baggage. If your baggage is lost or damaged by a carrier (or if items are stolen from your baggage), you will be reimbursed for lost/stolen items.
  • Travel delay. Suppose you are delayed for a covered reason. In this case, you may receive monetary compensation for meals, hotels, transportation and other covered purchases made due to the delay, such as an extra night in a hotel.
  • Trip cancellation. If you need to cancel a prepaid, non-refundable trip, you may receive compensation to make up for lost funds. This benefit generally applies to cancellations for covered reasons, which vary by card.
  • Trip interruption. Maybe you’re already on a trip and your plans changed halfway through. You can be refunded for any reservation that is unused, prepaid and non-refundable for a covered reason.

Read the terms of your card to see what types of incidents are covered and the maximum dollar value they will pay.

Some credit cards also offer rental car insurance

Similarly, some credit cards offer free rental car insurance, which may be primary or secondary to your personal auto insurance, depending on the card. Coverage is usually collision damage waiver or damage waiver, which means you’re covered for the cost of repairing or replacing your rental car in the event of an accident or theft. The insurance may also cover related costs, such as towing costs and administrative costs.

Typically, you must pay for your car rental with a credit card that provides coverage and decline collision coverage from the car rental company to obtain this benefit. This type of coverage generally does not cover liability and personal injury, which comes into play if your car damages other property or injures you or someone else.

Also, it generally won’t cover loss or theft of personal effects inside the car, so don’t expect relief if someone breaks into your rental car and steals it. suitcase that you had sitting on the seat.

And be careful if you rent from a non-traditional car rental company, like Turo or Getaround. Peer-to-peer car rentals are likely not covered by credit card rental insurance.

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How to file a claim when using credit card travel insurance

If your trip is canceled or delayed for a covered reason, you will need to file a refund request, which can usually be done through your credit card issuer’s website.

You probably won’t be dealing with your credit card company, but rather with the insurer itself. Most benefits are underwritten and managed by third-party insurance companies. Be ready with documents to show proof.

The window for making a claim can be short. For example, for Chase JPM,
+1.61%,
it’s up to 20 days after the event — so don’t wait. You will generally have more time to provide documentation, which is 90 days for Chase.

Documentation requirements vary, but you’ll likely need to provide the following to get a refund:

  • Proof of your covered reason (such as a doctor’s note or death certificate).

  • Receipts of your expenses.

  • A copy of your account statement showing these charges.

  • A copy of your travel provider’s cancellation or refund policies.

Also see: ‘If you wait for the right time to travel, you may never do it’ – seniors take stock of risks as COVID cases rise

Why doesn’t my credit card insurance cover my trip?

Travel insurance can be a lifesaver in covered situations. But many issues that arise during your trip, for which you might expect to be covered, are not exactly what is covered.

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This is true for standard travel insurance and your credit card coverage. Although coverage varies by insurance company, common situations that are not covered include:

  • Travel arrangements canceled or changed by the travel supplier. Unless it is due to extreme weather conditions or an organized strike affecting public transport, problems attributable to the travel supplier may not be covered. For example, you might be out of luck if your airline cancels your flight because the pilot called in sick and you missed a hotel night that you paid for.
  • Changes in your plans due to financial circumstances. If you realize after booking that you can’t afford the expenses you’ve incurred, well, you’re still hooked.
  • Have a pre-existing condition or travel against medical advice. This can be tricky, but the insurer can dispute your complaint if they can prove that the reason for your cancellation resulted from a condition you already knew about or that your doctor told you about.
  • Extremely long or short trips. As a general rule, one-day trips, as well as those lasting more than 60 days, are not covered.

If you need to cancel a trip for a reason that isn’t covered, you might be better off getting Cancel for Any Reason coverage, which lets you do just that. It’s an extra expense, but it can save you money if you cancel for any reason (including reasons otherwise not covered).

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Sally French writes for NerdWallet. Email: [email protected] Twitter: @SAFmedia.

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