Do You Really Need Travel Insurance?

Buying an airline ticket online comes with one decision that’s notably bigger than aisle or window: travel insurance. Coverage of expenses in the event of a trip interruption or cancellation can add as much as 10 percent to the cost of a trip. As with all insurance, travel coverage looks like a great deal when you need it and a waste of money when you don’t. But before you weigh the pros and cons of extra-cost trip protection, here’s some good news: You may already have it.

A good many credit cards come with some form of travel insurance as a perk, which means that there is little need to pay extra for coverage at the point of purchase. This sort of coverage is distinct from travel medical insurance, which covers emergency medical costs and, if necessary, evacuation for travelers venturing out of their home country.

As the holiday season kicks off, it pays to do your homework and know your options, before you make a travel purchase: Some of the most expensive cards, including the American Express Platinum Card, offer less respite from the travel interruptions of recent hurricane delays and flight cancellations than some less elite cards.

How do I know if I have it?

“Travel insurance plans offered by airlines and cruise lines are often written with the companies’ best interests in mind,” says Joe Cortez, travel columnist and expert for MileCards.com. “While those policies will cover some situations, they usually come with strict limitations. Before buying, always check the insurance offered by your cards, and compare that to third-party insurance policies.”

The most popular cards typically come with some form of travel insurance. For example, American Express Platinum cardholders are protected if their luggage is lost or delayed, but that card won’t protect you in the event of a trip disruption like canceled flights from natural disasters. (The company did waive travel change fees for trips booked through American Express during recent hurricanes, but it did not cover hotel charges or alternative air arrangements.)

Other cards do have notable forms of protection with varying lengths of delay needed to trigger the insurance benefit. For example, the JetBlue World MasterCard from Barclaycard kicks in coverage for meals and accommodations if your trip is delayed at least six hours and was originally paid for with the card. Other cards with similar provisions include the Chase Sapphire Reserve and Chase Sapphire Preferred, Citi Prestige and Citi ThankYou Premier, and the United Mileage Plus Club and United Mileage Plus Explorer cards. Details are noted on each card’s website and your cardholder agreement.

And although it may seem obvious, it bears mentioning that to take advantage of a card’s perks, including travel insurance, you’ll have to pay using that card. Some credit cards, like Chase Sapphire Reserve, even cover award-travel disruptions as long as you pay the taxes and fees with your card.

“The great thing about insurance plans from your credit card is that they are already built into your trip and often extend coverage to your travel companions,” Cortez says.

It’s not just airfare that is covered: Citi Prestige also provides roadside assistance, which can be helpful if you’re renting a car. And cards such as the Barclaycard Arrival Plus World Elite MasterCard include such perks as rental-car collision damage waivers and trip cancellation for extended circumstances like jury duty and even medical quarantine.

What is the airline responsible for in a delay?

Before going the travel-insurance route, it’s worth figuring out what the airline is on the hook for in the event of a delay. (Don’t count on representatives being particularly forthcoming with this information.) If the delay is due to maintenance or situations under the airline’s control, the carrier must provide hotel accommodations if the delay requires an overnight stay and a meal allowance if your wait crosses over a mealtime. Sometimes, these allowances are not always offered at the gate; you may need to ask for them.

If the delay is due to weather or air traffic control (sometimes the result of a related issue in a completely different city), you’re on your own. The occasional exception might be made for fliers with an airline’s top elite status or premium cabin tickets, but this is becoming less common as carriers tighten budgets and wrench away control from gate and reservations agents. That’s when travel insurance would kick in to save the day. If you’re trying to catch a cruise ship or make an important deadline, travel insurance (whether purchased or through your credit card) can make all the difference.

If you are traveling on an airline whose home base is in the European Union (or any airline departing from a European Union city), there is built-in coverage for extended delays that are within the airline’s control. It is known as the EC261 Flight Compensation Regulation, which can provide, at the very least, hotel and meal assistance. Again, you may have to request such accommodations; the airline won’t make an effort to illuminate your rights.

If I buy travel insurance, what’s covered?

The decision to purchase travel insurance, if it is not already included with your credit card, can hinge on where and when you are traveling, according to Stan Sandberg of TravelInsurance.com. Traveling around the holidays, when you must be in a specific location on a certain date, is a good example. If you are headed to a ski destination where the weather can play a role in flight delays and cancellations, travel insurance can help. There’s also the added benefit of hazardous sports coverage, which could protect you if you get injured, or lost ski day coverage, which could cover the cost of things like pricey, prepaid ski lift passes if your flight is delayed.

On occasion, travel insurance can protect you even before your journey has begun. Perhaps a hurricane or forest fire has prevented you from reaching the airport, or worse, it’s damaged your possessions to the point where you choose not to travel.

American Express Travel Insurance (purchased separately and not necessarily included as part of a credit card agreement) covers such mishaps as trip delay and cancellation from natural disasters.

There is also an optional extra offered by some insurance companies that allows for cancellation for any reason. While not inexpensive, such a provision can come in handy if your travel plans change regularly, or you decide to cancel your trip for a less tangible reason, such as a threat of terrorism.

What if my luggage is lost?

This is another category that falls into the travel insurance realm and one that could be more valuable than coverage from trip disruptions. If your bag is delayed on the way to your destination, you can expect more sympathy from your airline, but if luggage is delayed on your return home, you are less likely to receive any support. At your destination, the airline may provide compensation for emergency supplies while your luggage is located, retrieved, and delivered. This includes basic clothing, toiletries, or one personal device charger. But there are limits: Confirm them with your airline before you shop.

Airlines vary in their interpretation of what can be purchased while you wait for a delayed bag to be delivered, but if your bag is totally lost, travel insurance can help. Be sure to take a photo of the contents of your bag before you travel, as this could come in handy when filing a claim. Also, note that many travel insurance providers expressly exclude coverage of things like electronics and jewelry, although providers like Allianz cover them up to a certain monetary limit.

The travel insurance provided by your credit card only kicks in after the airline has done its part to cover any losses, so be sure to have some documentation that details what you had inside the bag. Yes, everyone points fingers when bad things happen, but if you know your rights, you can be sufficiently covered.

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