How does travel insurance work on a credit card?

Credit card travel insurance protects you from some unforeseen circumstances that may disrupt your travel plans. If your credit card includes travel insurance, you may be reimbursed if your travel is affected by weather, health issues or certain kinds of emergencies outside your control.

Typically, credit card travel insurance only covers the expenses that you charge to that specific card. And because different cards have different travel insurance policies, it's important to read the fine print in your card's terms and conditions to understand your coverage levels.

What is travel insurance?

Travel insurance provides protection for expenses associated with travel, both domestic and international. Travel insurance may reimburse you if your trip gets cancelled, delayed or interrupted--or if you have to pay medical costs that your primary health insurance can't cover.

Travel insurance benefits can be broken down into a few different categories:

• Trip cancellation insurance may reimburse you if your pre-booked, non-refundable flight (that was booked with the same credit card) is cancelled under unforeseen circumstances, such as injury or if your flight is cancelled due to weather conditions or other.
• Your credit card's trip cancellation insurance may reimburse you for prepaid flights and hotel stays booked with your credit card. 
• Trip interruption insurance (for trips that end earlier than planned) may cover expenses like the cost of a last-minute flight home. In most cases, only the part of your trip that was interrupted will be eligible for reimbursement.
• Travel delay insurance may reimburse expenses, such as a hotel stay, that arise from severe delays.
• Medical insurance works like a supplement to your existing health insurance, which may not cover medical costs that you incur abroad. Evacuation insurance covers the costs associated with an evacuation following a weather event or other disruption.
• Baggage insurance is supplemental to coverage provided by your airline or via your homeowners or renters insurance policy. Baggage coverage may reimburse you for the actual or replacement cost of your possessions, should they go missing as you travel.

What are the benefits of credit card travel insurance?

Many airlines and tour operators offer travel insurance as an add-on at point of purchase. Credit card travel insurance, on the other hand, is a feature offered on certain credit cards.

Credit card travel insurance provides the following benefits:

• Financial protection: Comprehensive credit card travel insurance can provide full coverage should a covered event--such as severe weather, a medical emergency affecting you or a loved one, or loss of employment--occur. In many cases, travel insurance may require you to pay any expenses out of pocket, then file a claim later for reimbursement.
• Evacuation assistance: If your credit card travel insurance includes evacuation coverage, you can get help securing transport when a covered event (like weather or a political incident) disrupts your travels. Depending on the coverage provided by your credit card travel insurance plan, even emergency medical evacuations such as those on a private jet-may be covered.
• Supplemental medical coverage: Many health insurance plans don't cover medical costs incurred outside the country. Even those that do are likely to charge a deductible. Credit card travel insurance that includes medical coverage may pay for some medical costs, including your primary plan's deductible.
• Peace of mind: Having credit card travel insurance can give you the confidence to make bold travel plans--or jet somewhere sunny in the dead of winter. A major storm might snarl your vacation plans, but with travel insurance you may get fully reimbursed.

What questions should I ask about credit card travel insurance?

Credit card travel insurance provides many benefits, but be sure to understand what coverage your card provides before you book a trip. Do your research and ask questions to maximize the value of your credit card's travel insurance program:

• What coverage levels does my card offer? Get a copy of your card's full terms and conditions to learn exactly what kinds of travel coverage are included.
• Are my family members covered by my credit card travel insurance? Travel insurance typically covers events that affect your immediate family: for example, if your child gets sick before you embark on a flight. Your more distant relatives--and pets--may not be covered, however.
• What specific events are covered? Understanding the events that can trigger a claim is crucial to getting the most out of travel insurance. For instance, involuntary unemployment may qualify you for cancellation protection--but leaving your job voluntarily may not.

Relying on credit card travel insurance

Credit card travel insurance can offer financial protection and peace of mind when you travel. Take the time to understand how your card's travel insurance works-and be aware that only expenses charged to your card are likely to be covered.

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