Is Dan Kriser overdoing it? “I know that as long as you have a major credit card you don’t need to buy additional insurance when you rent a car,” says Kriser, an investment manager from Highland Park, Illinois. “But how about trip insurance when you travel?”
Specifically, Kriser wants to know how his credit card—a United MileagePlus Visa Signature—stacks up to his Allianz Global Assistance plan. “Am I buying essentially the same insurance twice?” he wonders.
“Am I buying essentially the same insurance twice?” he wonders.
Answer: they are not the same. And it’s an important exercise for the rest of us, who might be thinking of skipping a travel insurance policy for an upcoming trip. Read the fine print before you make any decision.
Review the terms before you cancel
Credit card insurance may or may not work. I normally hear about it when it doesn’t, like Monique Tubb’s case. Her adult daughter was injured while vacationing in Colorado, so she canceled the rest of her trip and flew home immediately. Tubb thought her UnitedPlus Explorer card’s insurance would help her, but it didn’t. Turns out the card only covered “prepaid” expenses.
Travel insiders like Ann Geraci know that you have to carefully review the credit card terms before your trip. Geraci, a travel agent from Northbrook, Illinois, notes that her MasterCard covers trip interruption and cancellation due to medical reasons.
“But the hitch is that is MasterCard takes the claim, then must wait 12 months before refunding the amount,” she says.
Why so long? Because a ticket has value for 12 months from the date of issue, even though the ticket amount is less than the $200 exchange fee in case you wanted to apply to another ticket.
“So, buy the additional insurance if you want, and wait just 30 to 60 days for the refund—or place the claim with your credit card and wait the 12 months for a full refund.”
Not all insurance plans have the same coverage
Kriser’s question doesn’t have a quick answer. If you take a look at the lengthy benefits guide and then compare it to a sample Allianz policy, you’ll see why.
The card insurance covers basics like car rentals, trip interruption, and cancellation. The standard “named perils” travel insurance policy covers more events, including delays, emergency medical and dental costs, and change fees. Even when the coverage looks the same, there are important differences.
Consider travel delays. The insurance delay policy kicks in if you’re delayed more for six or more consecutive hours for one of the following covered reasons:
✓ Strike or common carrier delay
✓ Your departure is delayed by a common carrier.
✓ Your departure is delayed by an unannounced strike.
✓ You are quarantined.
✓ Natural disaster or severe weather
✓ Severe weather delays your departing flight or causes road closures.
✓ Politics, violence or theft
✓ Your passports, money or other travel documents are lost or stolen.
✓ Your travel is delayed by a hijacking.
✓ Your travel is delayed by civil disorder or unrest.
Allianz covers prepaid expenses, as well as “reasonable” meals, accommodation and transportation expenses, up to $200 per day.
The card policy only covers equipment failure, inclement weather, labor strikes, and hijacking or skyjacking, but it only kicks in after 12 hours. It pays up to $500 for each purchased airline ticket. And, of course, you need to use that particular credit card to pay for your ticket.
Should you rely on your card’s insurance or not?
It depends. I hear from a fair number of travelers who wish they had purchased a real policy through an insurance company. But I also hear from folks like Julie Fried, whose luggage was delayed on a recent flight from Baltimore to St. Lucia.
Her airline offered to cover some, but not all, of her expenses.
“We had had many expenses due to our circumstances and spent a few hundred over what the airline allotted,” she remembers. “Our credit card told us to submit the rest of our receipts and to write a letter explaining the situation. It covered the difference with no problem.”
Bottom line: Read your card coverage carefully when you make your travel plans. If you think you might need more protection, consider buying it.
DISCLAIMER: This article expresses my own ideas and opinions. Any information I have shared are from sources that I believe to be reliable and accurate. I did not receive any financial compensation in writing this post, nor do I own any shares in any company I’ve mentioned. I encourage any reader to do their own diligent research first before making any investment decisions.
Japan’s blockchain sector grew by 30.7% over the year
The integration of the cryptocurrency sphere into the classic financial world of Japan is evidenced by the fact that 31...
Crowdfunding helped Cervecería de Colima to weather the coronavirus crisis
Between February 12th and 27th, Cervecería de Colima raised $448,620 (10 million pesos) through the equity crowdfunding platform Propeler. With...
Precious Metals Investing: Small-cap gold producer Inca One Gold launches the first comprehensive database of Artisanal Gold Mining operations in Peru: XplorTracker
Knowledge is power and in business good data makes all the difference. Inca One Gold Corp. (TSXV: IO.V, OTC: INCAF,...
Record growth in mobile gaming: Tencent (TCEHY) and LEAF Mobile Inc (TSX.V: LEAF) shows the potential of an innovative industry unfettered by Covid-19 in 2020
While traditional gaming companies like Activision Blizzard (NASDAQ: ATVI) fail to fall victim to the pandemic, mobile gaming companies like...
Tyba reaches 100,000 users in Colombia despite the crisis
Tyba, a digital platform that offers investment and savings services, exceeded 100,000 users in Colombia, a goal that was accelerated...
Featured7 days ago
Credimi and Banca Generali partner to help SMEs in Italy
Crypto7 days ago
How governments are analyzing Crypto and Blockchains
Business5 days ago
How to invest in a bear market: Why small-cap gold producers like Inca One belong in your precious metals investment portfolio
Business6 days ago
Mobile gaming investments? Consider Leaf Mobile (TSXV: LEAF), Activision Blizzard (NASDAQ: ATVI), and Tencent Holdings (OTC: TCEHY)