Surprising Facts: How Effective Are Insurance Policies That Come with Credit Cards?
In the US, in 2023, a couple took their honeymoon in Italy to court due to delays on their return flight. Their flight was delayed by 18 hours, resulting in approximately $1,200 in extra hotel, food, and clothing expenses. However, their credit cards did not cover these expenses. Why? Their cards' “trip delay coverage” limit was only $500, and the delay threshold was 24 hours. So, there was insurance, but it was almost non-existent.
Chase Sapphire Preferred offers a $500 “Trip Delay” coverage starting from a 6-hour delay, while American Express Gold cards only provide this coverage on premium travel cards. So, even if you're on the same airline and experience the same delay, whether you receive compensation depends on the brand of your card.
In fact, on some cards, baggage loss insurance is only valid if you checked in and paid for the entire flight with the card. So, if you bought the ticket with points or changed airlines, all insurance is automatically disabled.
Insurance Covers, But Not Everything
Travel insurance offered by cards generally covers flight delays, lost luggage, emergency medical assistance, and trip cancellation. However, these must be for “valid” reasons.
For example, if you need to cancel your trip, the reason must be a documented illness with a doctor's note. Canceling a ticket because “I have to work” is not covered by insurance. Similarly, if your luggage is delayed for less than 5 hours, most cards will not reimburse you for clothing or other items. After COVID, some card companies excluded “pandemic-related cancellations” from coverage. So yes, insurance exists, but it's not full protection; relying on it without reading the fine print is a mistake.
Some Credit Cards Will Actually Save You (But Which Ones?)
Chase Sapphire Reserve covers serious health issues, emergency evacuations, and even the cost of repatriating the remains of travelers who die abroad. Capital One Venture X covers up to $100,000 for medical evacuation, but note: there is a list of “excluded countries.”
The Platinum Card® from American Express offers trip cancellation insurance, but it only applies if your entire flight ticket was paid for with the card. There is no guarantee that points+cash tickets will be covered. Some insurance policies only cover you during the process between the airport and the hotel. So if you fall while skiing or something happens during a safari, some cards won't cover the costs.
Credit Card Insurance vs. Real Travel Insurance
Credit card insurance is usually “secondary” insurance. What does that mean? You must first file a claim with your own travel insurance or airline. If you can't get a refund from them, then the card insurance kicks in.
Some cards offer “primary” insurance. For example: Chase Sapphire Preferred's car rental coverage is primary insurance that kicks in directly. On the other hand, most cards' car rental insurance only works as a secondary option. This distinction is important because using secondary insurance requires you to go through the hassle of filing a claim, gathering reports, and waiting. So you get support not when you need it most, but when you're already in a bind.
Number of Lawsuits Between Travel Insurance and Credit Card Insurance in the US on the Rise
In the last 5 years, disputes over credit card-related travel insurance have tripled on US consumer complaint platforms. The most common complaints are “no refund,” “unclear policy details,” and “late payment.” In 2022, a user in New York canceled a $7,000 cruise tour relying on card insurance and received only $500. The court ruled that the card company was partially at fault for not clearly providing policy details. So, even if card insurance doesn't legally protect you, you could still end up in court.
Credit Card Insurance Is Useless for Visa Applications
Most travelers heading to the Schengen area from the US believe that credit card insurance is valid for visa applications. However, consulates in Germany, Spain, and France often reject card-based travel insurance as “inadequate coverage.”
These consulates require insurance with a 30,000 Euro coverage limit, compliant with Schengen regulations, and a policy that can be provided in PDF format. Insurance provided by cards such as Amex, Chase, and Citi do not meet these requirements, neither in terms of coverage limit nor policy format. Therefore, if you apply for a visa assuming your credit card includes travel insurance, your application may be rejected due to missing documentation.
Who Really Benefits from Credit Card Insurance?
• Ideal for frequent business travelers. If you take 4-5 flights within the same year, flight delays and baggage issues occur on average 20% of the time.
• Insufficient for those traveling to high-risk countries. For example, if you are traveling to Latin America or Southeast Asia, medical evacuation coverage becomes critical, but most cards fall short in this area.
• Solo travelers typically benefit more from card insurance. Because if all tickets aren't purchased with the same card during group trips, some people's insurance may not apply.
So, card insurance doesn't offer the same benefits to everyone; it can be a boon or a bane depending on your style and destination.
Note: Insurance is often not included for tickets purchased with points
Tickets purchased with points, especially those reserved using Amex Membership Rewards or Chase Ultimate Rewards points, may fall outside the scope of automatic insurance coverage. If only taxes were paid with the card, many cards do not provide coverage. An exception: Some premium cards, such as the Chase Sapphire Reserve, may offer full coverage even for tickets purchased with points—but this information is often hidden in the policy. In short, if you purchased your entire airline ticket with points, saying “I paid with my card” is not always accurate and could invalidate your insurance.
Real Limits on Medical Care: Where Do Cards Draw the Line?
• When you visit an emergency room abroad, how much will your card insurance cover?
– Amex Platinum: up to $2,500 per person
– Capital One Venture X: up to $100,000, but only if evacuation is required
– Citi Premier: generally not covered, does not include health insurance
• Important distinction: Medical evacuation costs and emergency treatment costs are different things.
– Many cards do not cover evacuation expenses (e.g., helicopter transport).
– Hospital expenses are only covered if prior approval is obtained.
So, not every card is a “lifesaver” in terms of health. They should not be considered equivalent to a real insurance policy.
Airport Chaos: Baggage Delays and Losses
Card insurance typically covers baggage expenses under the following conditions:
• Your luggage must be delayed for at least 6 hours
• Essential items (underwear, t-shirt, toothbrush) must be purchased
• A receipt must be provided, and purchases must be made at stores valid within the country
However, for example, if you shopped in a rural town in Europe or bought clothing from a local market, the card company may reject these expenses. Additionally, some cards offer a maximum coverage of $3,000 for lost luggage, but only $500 for valuable items (laptop, camera). This means that if you lose your Apple MacBook, the full amount will not be covered.
Bad Surprise: Your Insurance May Be Immediately Reset If You Change Your Card
A user switched from Chase Freedom to Chase Sapphire Reserve and found that the insurance coverage for a plane ticket purchased with the old card had automatically been dropped. This is because when the new card was opened, the old card was closed and the payment record for that ticket was deleted. A similar incident occurred in 2023 with Capital One cards: when a user upgraded their card from “Venture” to “Venture X,” reservations made with the old card were not recognized by the insurance system.
When you change or upgrade your card, the new insurance policy does not cover past expenses. Therefore, it is recommended that you complete your travel before upgrading.
Insurance Process: You Thought It Would Be Easy, But It Wasn't
The coverage offered by card insurance is not user-friendly at all. Here are the procedures encountered in real life:
• To receive “Trip Delay” payment:
– Delay certificate from the airline
– Presentation of invoice
– Hotel receipt and dated proof of payment
– Flight ticket number
– Some cards require a document showing that a solution was sought with the airline
• For “Lost Baggage”:
– Airport baggage loss form
– Value and brand information of the items
– Invoices, if purchased
– Some cards even require proof with photos
So instead of thinking, “I'll send an email and get my money back,” you need to be prepared to deal with bureaucracy.
Most Frequently Rejected Damage Claims (And Why They Are Rejected)
• Trips you canceled yourself:
– Personal reasons such as “I didn't feel like it” or “the weather was bad” are invalid.
– A doctor's note, death certificate, or mandatory court summons is required for cancellation.
• Accidents occurring under the influence of alcohol:
– If your medical expenses are related to alcohol consumption, your card will not cover the costs.
– Some cards even require additional documentation for accidents occurring during nighttime hours.
• Situations where alternative routes are possible:
– For example, if your flight was canceled but there was another flight on the same day, the coverage would not apply.
– The insurance company may exclude you from coverage by stating that “alternative transportation was available.”
Real User Experiences and Complaints
In an incident shared on Reddit in 2022, a user purchased clothing from Walmart because their luggage was delayed by 8 hours. However, Capital One denied the expenses, claiming they were “luxury consumption.” Reason: The clothing brands were Levi's and Adidas. The user could have been reimbursed if they had purchased the same items from cheaper brands.
Another user was unable to get a refund for a canceled Bali trip charged to their American Express card because the reason for canceling the trip was their spouse's pregnancy – which was not considered an “emergency medical reason” under the policy. These examples highlight how limited credit card insurance actually is.
The Difference Between Cards Is Like Night and Day
The insurance coverage offered by different cards under the same bank varies greatly. Example:
• Chase Sapphire Preferred:
– Trip delay: $500 limit, valid after a 12-hour delay
– Baggage delay: $100 per day, maximum 5 days
– Medical evacuation: Not covered
• Chase Sapphire Reserve:
– Trip delay: $500 limit, only valid after 6 hours
– Baggage delay: $100 per day, but the application process is more flexible
– Medical evacuation: Covered up to $100,000
So, the brand is the same, the bank is the same, but as the card level changes, the protection wall changes completely.
If you engage in risky activities, your card insurance may leave you stranded
Travel insurance offered by credit cards is often valid for “standard travel scenarios.” But when it comes to “high-risk” activities such as skiing, diving, climbing, or safaris, the situation changes:
• Chase Sapphire Reserve covers amateur skiing accidents but excludes “backcountry skiing,” which refers to skiing outside controlled areas.
• Amex Platinum only covers diving accidents if you are a certified diver and the tour company is insured.
• Activities like ziplining, parasailing, and bungee jumping are explicitly excluded as risky recreational activities by many cards.
• A user requested payment for treatment after being bitten by a snake during a safari in Tanzania. However, the card company rejected the claim on the grounds that “the activity is subject to special insurance.”
In short, the more your trip becomes ‘Instagram-worthy,’ the more likely your card insurance is to exclude that experience from coverage.
Families with Children Take Note: Card Insurance May Not Cover Everyone
Insurance on tickets purchased with a credit card is usually limited to the cardholder. However, some cards also cover spouses and children. But there are significant differences here:
• Chase Sapphire Preferred covers spouses and children under 24 on tickets purchased with the card—but only if the children are the cardholder's legal dependents.
• Amex Platinum only covers “authorized users” on tickets purchased with the card. So if you haven't designated your children as separate users, the travel insurance won't apply.
• In 2021, a mother purchased four airline tickets with her card. Her child fell ill during the flight and she filed a claim for hospital expenses. However, only she was reimbursed; the child was not covered by the policy.
If you are traveling with children, you must check whether the “family coverage” definition is clear before relying on your card.
Card Insurance Does Not Cover Expenses Paid with the “Same Card”
Let's say you paid for the plane ticket, hotel, transfer, and rental car with your card. But if you made these payments with different cards, separate insurance will apply for each service—or none at all:
• A user paid for their flight ticket with American Express and their hotel reservation with Chase Sapphire. When the trip was canceled, they could only receive reimbursement for the flight ticket.
• Since the hotel payment was not made with Amex, Amex's insurance did not apply.
• Similarly, expenses such as Uber transfers or train tickets are excluded if they are not recognized as “travel expenses” by the card system.
So, if you didn't pay for all services during your trip with the same card, you should know that each insurance policy only covers its own area.
How Long Does Card Coverage Take to Kick In in a Real Emergency?
The question “Okay, the card has insurance, but does it really work?” becomes most important in “emergency” situations. The response time for card coverage varies as follows:
• American Express Global Assist:
– Emergency phone support: Average 15–30 minutes
– Dispatch of assistance: 4–6 hours
– Payment approval: Done retroactively, usually within 7–14 business days
• Chase Benefit Services:
– Receives requests via web form
– Document upload and verification time: 10 business days
– Payment after approval: Average 21 days
So, in a serious situation, card insurance requires you to pay out of pocket immediately. You submit the documents later – which basically means you pay first, and we'll look into it later.
Some Cards Offer Insurance as a “Credit Card Surcharge”
Not all cards automatically include travel insurance. Examples:
• The Wells Fargo Autograph card does not offer travel insurance, but it can be added for an extra fee
• The Barclays Arrival Plus card does not automatically include insurance when the card is opened – users must register separately for insurance
• Some cards, such as the US Bank Altitude Reserve, require additional activation for insurance beyond the annual membership fee; if this is not done, the insurance will not be activated
So in some cases, insurance may appear to be available, but if it is not activated, you may be traveling with “zero protection.”
Do Credit Card Insurance Claims Affect Your Credit Score?
Claims made through travel insurance generally do not directly affect your credit score. However, there are indirect effects: If you have spent close to your card limit and are expecting a refund from insurance while payments are delayed, this could harm your credit score.
For example, your flight was canceled, you purchased a new ticket for $3,000, and filed an insurance claim for reimbursement. However, when your credit card statement arrived, the reimbursement had not yet been processed. You were unable to make the payment, and the system recorded it as a “delay.” In addition, some card providers may interpret multiple insurance claims as “suspicious user behavior” and lower your credit limit or close your card. So, it cannot be said that “insurance claim = lower credit score” directly, but a chain reaction can cause damage.
Application Period: How Much Time Do You Have?
There is a specific time frame for filing a claim for credit card travel insurance. And this period is usually not clearly stated to the user:
• Chase: The claim must be filed within 20 days of the travel incident, and documents must be submitted within 90 days.
• American Express: Most cards require a claim to be filed within 30 days.
• Capital One: If you do not apply within 60 days of the incident, you will lose your rights
So, thinking “I'll deal with it later” when the incident occurs is risky. Documents sent 3 months later may be rejected on the grounds of “time bar.”
Insurance Companies Use Systems Designed to Deliberately Reject Claims
Card companies do not offer insurance directly; they typically outsource this service to third-party insurance providers. For example: Chase works with a company called Eclaimsline. American Express uses global insurance companies such as AIG or AXA. Capital One typically has an agreement with Allianz Global Assistance.
These companies automatically reject most users in the first stage using “automatic filters”:
– Payment document missing
– Activity not covered
– Late application
– Insurance coverage misinterpreted
But many users are unaware that over 60% of those who appeal the initial rejection and move to the second stage receive a refund. This is because the system aims to “weed out users who give up.” If you persist, you can get what you are entitled to.
How long after your trip should you report damage?
Especially in cases of physical injury or health issues, the time between “when the damage occurred” and “when it was reported to the card provider” is important. If you were treated at a hospital abroad but did not report the incident, the insurance company has the right to reject your claim on the grounds that “the transaction was made without our approval.”
• For example:
– A user who sprained their ankle during a safari went to a hospital in South Africa and paid with their card
– Upon returning home, they filed a claim, but the insurance company closed the case, stating that “we were not informed at the time of the incident.”
Therefore, if you are traveling with card insurance, it is important to call your card provider first and report the incident in case of an emergency. Otherwise, all documents may be deemed invalid.
Warning: Those Who Rely on Insurance and Do Not Purchase Secondary Insurance Are at Great Risk
Users who rely heavily on card insurance often do not purchase additional individual travel insurance, especially for long overseas trips. However, card insurance may exclude you from coverage due to reasons such as length of stay in the country, age criteria, or medical history.
For example:
– A 69-year-old user suffered a heart attack during a European tour
– The card insurance refused to pay, stating, “The age limit is 65”
– However, an additional travel policy costing just $29 would have covered all expenses
So, card insurance may be a ‘nice bonus,’ but it does not replace proper coverage.