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Credit Card Insurance Guide

Published by My Rate Compass Team | Updated Nov 19, 2020
Credit Card Insurance Guide

Credit Card Insurance


Canadian credit card companies offer a variety of insurance options for cardholders. In order to take advantage of the insurance, you must use an eligible card for the booking or purchase. Look at the various options out there,  to have a better understanding of the benefits that come with credit cards.

Collision and Damage Insurance

When you rent a car, the rental company may ask you to purchase their optional daily insurance or its daily Collision Damage Waiver (CDW) or Loss Damage Waiver (LDW). This coverage could cost up to $30 per day and will cover you for any loss or damage to the vehicle itself. This insurance does not cover damages to properties, people or other vehicles.

Many credit card companies offer collision and damage insurance that takes effect when the cardholder rents a car and declines the rental company’s daily insurance. You will be covered if the auto rental transaction is initiated and charged in full to your credit card. The coverage under the policy may differ depending on the type of credit card.

If one of the credit cards you own has the collision and damage coverage you do not need to purchase the optional Collision Damage Waiver offered by the rental company.

Delayed Baggage Insurance

If you get to your destination before your luggage does, you will likely have to purchase some essential items, such as toiletries. You  may also have to buy new clothing if the luggage is delayed for a day or longer. If you have delayed baggage insurance on your credit card, you will be able to file a claim and get your money back for these purchases. Certain items, such as cell phones and contact lenses, are typically  excluded from claims, and there are claim limits  in place.

Extended Warranty Insurance

If you buy something at the store, the clerk might try to sell you an extended warranty. Before you agree to buy it, see if your credit card offers extended warranty insurance. Extended warranty insurance offers additional coverage for certain products. The warranty typically matches the manufacturer’s warranty, meaning that it covers the same things that the original warranty covers.  Such insurance typically extends coverage for up to a year and is generally a much better deal than the extended warranties sold by stores.

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Flight Delay Insurance

When a flight is delayed, it is normal to incur some expenses, such as hotel room, rental car, and meals. Credit card companies that offer flight delay insurance will reimburse you for reasonable expenses. The reimbursed items cannot be offered free of charge by the airline, and,  therefore, must be reasonable. A thousand dollars at a five-star hotel with expensive room service  will not be considered reasonable, so keep that in mind when using this insurance.


Hotel/Motel Burglary Insurance

If you check into a hotel and go sightseeing, your belongings are left unprotected. Sure, you lock the hotel door, but you can’t stop someone from breaking in, just like you can’t stop a member of the hotel’s staff from taking an item or two. Hotel/motel burglary insurance will cover you in case of a burglary. The insurance usually kicks in as soon as you check into the hotel and remains active until you check out.


Trip Cancellation/Interruption Insurance

When you book a trip, you have every intention of going, but what happens if something comes up? If you have to cancel a trip or cut your vacation short, your credit card might cover your losses. Trip cancellation/interruption insurance covers non-refundable travel expenses, including your airfare. The trip must be cancelled or cut short for a covered reason.


Travel Medical Insurance

While some medical insurance policies offer international medical coverage, the coverage is often relatively small. If you get sick or injured when  overseas, the medical bills can be staggering. Credit cards that have travel medical insurance provide reimbursements for the medical bills incurred. It’s important to look at the maximum benefit to understand how much will be covered if you seek medical care overseas.


Travel Accident Insurance

Serious accidents can occur when flying in a plane, riding on a train, or sailing on a ship. Credit card accident insurance covers accidents that lead to death or the loss of vision, hearing, or limbs. Credit card companies have different payment tables,  which means cardholders and beneficiaries with one company can make more or less than cardholders or beneficiaries with another company.


Lost Luggage Insurance

If the airline loses your baggage and never recovers it, you can file a claim using your credit card’s lost luggage insurance. Credit card companies that offer this coverage typically pay a replacement cost for the luggage  and might also cover bicycles  checked with the airline. The replacement cost is typically a flat rate, and may, therefore  not fully cover the cost of the items that were lost.

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Purchase Security Insurance

If you buy something and it is stolen or damaged, it might be covered by your credit card’s purchase security insurance. This benefit covers items that are stolen or damaged within a set period of time after the purchase. The timeframe is usually around 90 days. Credit card companies have strict rules regarding what is and isn’t covered. You need to look through your credit card’s policy to find out if your items are covered.


Price Protection Insurance

Comparison shopping is hard work, and you don’t have to mess with it if you have price protection insurance. For example,if you buy an item and find it for less within a set period of time, your credit card company will issue a refund for the difference. The lower priced item must be exactly the same as the item that you purchased, and you have to contact the credit card company to get the refund. You  must also prove that you found the item at a lower price. For instance, you might have to show a store flyer with the item priced at a lower amount.

These credit card insurance offerings provide consumers with a great deal of protection. When looking for a new credit card, it is a good idea to go beyond interest rates and see what insurance protections they include. These incentives can save you a large amount of money. 

 

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