Credit card insurance is an often overlooked and undervalued benefit that comes standard with most premium credit cards.
Even most regular credit cards typically have some form of purchase protection or extended warranty coverage.
Complimentary credit card insurance doesn’t only save you time and money researching and buying other insurance policies, it also provides incredible peace of mind (saving you some grey hair in the process).
In fact, you may be surprised to learn that there are 16 different types of insurance commonly available through credit cards at no extra cost to you.
But, keep in mind, no one card offers all 16 types. In fact,
16 Types of Travel and Purchase Insurance
Coverage ranges from extra protection on your purchases to travel insurance that protects you when venturing outside your home province…
Allowing you to travel, rent a car, and make purchases without worrying about:
- trip cancellation costs,
- an accident in your rental car, or
- having a new purchase stolen…
…just to name a few.
Here’s a quick breakdown of all 16 types of insurance:
1) Extended Warranty
An extra (extended) warranty that kicks in once the manufacturer warranty has expired. Most credit cards on the market will double the original manufacturer’s warranty length up to a maximum of 1 to 2 extra years, depending on the card.
Keep in mind that if the original warranty was only 30 days, then you will be limited to 30 extra days for a total of 60 days with the warranty doubling. You will only get the full extra year if the original coverage is at least a year to begin with.
This, and Purchase Protection insurance are the two most common types of credit card insurance. All but the most basic cards offer one or both of these.
2) Purchase Protection
Purchase protection will cover your purchases in the event that they are lost, stolen, or damaged. The coverage typically lasts for 90 days after you put the full cost of the purchase on your card with a select few cards stretching it as far as 180 days after purchase.
3) Price Protection
Price protection coverage will reimburse you the difference in price in the event that something you purchase goes on sale for a predetermined amount of time after you made the purchase.
You just need to purchase the item on your card and then prove it is for sale at the same store OR somewhere else for a lower price. There is usually either an annual limit or lifetime limit on the amount you can claim. Food and other perishable items are also normally excluded.
This is one of the more rare types of insurance so be on the lookout for cards that offer it – the
4) Mobile Device
Another rare type of insurance, some cards have built in insurance that will cover your mobile phone or tablet against being lost, stolen, or damaged.
It often isn’t quite as good as it sounds because it tends to be like tire insurance in that the amount you are covered for is reduced according to the age of your device. It’s still better than nothing after you realize your toddler threw your $700 phone in the toilet.
Desjardins is known for their mobile device insurance – most of their cards have it.
5) Travel Accident
If you suffer dismemberment or loss of life while traveling on a common carrier like a plane or a train, you or your family can receive a large lump sum payout.
Some cards cover you for up to $1,000,000 in travel accident insurance but it does range heavily depending on the type of accident and which card you choose so be sure to read the fine print.
6) Emergency Medical
One of the most important types of insurance to have is emergency medical to make sure your medical bills are covered if you get sick or injured when traveling. In most cases medicare will no longer apply and your work health plan may or may not cover you for travel.
Emergency medical is a relatively rare type of insurance but plenty of travel focused credit cards do have it. Some cards will cover trips extending all the way up to 60 days in length and even cover you if you are over 65 years of age, but that’s unusual. Most cards offer 15 days of coverage and either reduce or completely eliminate coverage for those over 65.
National Bank is one of few banks whose premium cards offer lengthier emergency medical coverage that also applies to those above 65.
In fact, the
7) Trip Cancellation
If you are forced to cancel your travel plans for a list of approved emergency reasons, then trip cancellation insurance will save your bacon if you went for the cheaper non-cancellable flights and hotels.
Trip cancellation coverage is even more rare than emergency medical and limits are usually quite low, often capping out at $1,500 or less. When you’re in a bind though, it’s way better than nothing.
8) Trip Interruption
More common than trip cancellation, trip interruption helps you out if you need to return home in the middle of your trip for a list of approved emergency reasons. Whatever additional travel costs are incurred to get back home quickly are typically covered up to a set maximum.
9) Flight Delay
If your flight is delayed for more than a predetermined number of hours, your card will cover you (maybe your traveling companions as well) for some food, lodging, and personal items you need to purchase to stay comfortable during the delay.
Coverage maxes out at $2,000 but is most commonly set to $500 per person if it is available at all. In some cases coverage is shared across Baggage Delay and Lost or Stolen Baggage coverage as well and can be spread across a period of multiple days.
10) Baggage Delay
Likewise, if your baggage is delayed for a predetermined amount of time, your card will give you some money to pick up some clothes and necessities to help you get by until your baggage is returned to you.
Coverage here tends to cap out at $1,000, again with $500 per person being the norm, but it is a fair bit more common than Flight Delay coverage.
11) Lost or Stolen Baggage
In the event that your baggage is not just delayed but lost or stolen, this insurance will cover the cost of replacing its contents.
This time coverage tops out at $2,500, but $500 per person is still what you should expect from most cards. Keep in mind that you can probably use Baggage Delay as a substitute for Lost or Stolen Baggage coverage if your card has one and not the other.
In addition, most airlines have their own policies for reimbursing you if your luggage is lost or stolen so check in with them. If you had expensive items in your luggage, you may be able to combine coverage from both.
12) Personal Effects
This type of coverage is the exceedingly rare, and covers any of your personal belongings, in the event that they are lost, stolen, or damaged, at any point during your trip.
Most cards only cover you for your bags while you are actually in transit, but this coverage doesn’t just involve your bags and it doesn’t matter when or how the loss happens. Even accidental damage to your personal items should be covered.
Unfortunately, like most of these policies there is usually an exclusion or limitation on expensive jewellery, phones, computers, high end electronics, and some other specialty items.
BMO is the only big 5 bank to offer this type of coverage and all of their World and World Elite cards have it.
13) Hotel Burglary
Hotel Burglary coverage is like a poor man’s Personal Effects insurance because it covers all your personal items but only if they are stolen out of your hotel room. It’s still better than Lost or Stolen Bags coverage that typically only applies while you are in transit on a common carrier though.
While most cards offer coverage between $500 to $1000, the
14) Rental Car Theft & Damage
Whenever you rent a car you are offered additional Collision or Loss Damage Waiver insurance that can easily add up to $30/day to your total rental cost. This covers you for any loss or damage to just the vehicle itself, and nothing else. Personal liability is different.
Fortunately, one of the more standard types of credit card insurance is rental car theft and damage. If you have this coverage, you can safely decline the CDW/LDW coverage on your rental car contract and save that money.
The only downside is that you may be on the hook for estimated damage costs immediately when they happen and have to get reimbursed later through the insurance company. Make sure you file a police report immediately if an incident takes place.
15) Rental Car Accident
This insurance doesn’t cover the rental car itself, your medical bills, or damage to anyone else’s property but, like Travel Accident insurance, it does payout out lump sums for specific injuries or the death of passengers traveling inside the vehicle. The payout is dependant on the severity of the accident.
16) Rental Car Personal Effects
Nearly identical to Personal Effects or Hotel Burglary coverage, Rental Car Personal Effects insurance covers you for any items that are damaged or stolen out of your rental vehicle. Some cards don’t even require you to be in the car at the time.
Now that we are all up-to-date on the different types of insurance and what they cover, let’s find out which cards will give you the best insurance.
Quantities are limited.
The BMO Effect
Premium BMO credit cards notoriously have really great insurance packages with three of their World Elite cards sporting 14 of the possible 16 types of coverage (and one with 13 types included).
That’s more coverage than any other credit card issuer with the next closest being Scotiabank at 12.
BMO World Elite Mastercard And BMO Air Miles World Elite Mastercard
With annual fees of $150 and $120 respectively, if you are looking for a card that has most of the insurance boxes checked and offers you great rewards and benefits, one of these two cards could be what you’re looking for.
Here’s the breakdown:
BMO CashBack World Elite Mastercard
This card definitely deserves special mention.
Not only does it offer cardholders all but three types of insurance, it also stands out among the rest because of its increased extended warranty and purchase protection.
While most cards only give 1 year of extended warranty and 90 days of purchase protection, the
With an annual fee of $120 this card gives you cash back rewards, great perks and 13 out of 16 types of insurance. It also has complimentary roadside assistance, which isn’t technically insurance, but is a really strong benefit that will help you out in a bind that few other cards have.
Here’s the breakdown:
Best Insurance Overall
Sometimes quality is more valuable than quantity.
So we decided to give cards an insurance score out of 5. Included in this score is how many types of insurance they offer and how the insurance amounts compare to other cards.
Desjardins Odyssey Visa Infinite Privilege
Despite only giving cardholders 10 out of 16 types of insurance,
The reason? It offers the highest amount of coverage in 8 of the 10 insurance types they offer.
One thing to keep in mind, however, is that this card does come with two big caveats:
- a $395 annual fee ($295 if you are a Desjardins member), and
- a family income requirement of $200,000.
Here’s the breakdown:
Scotiabank Platinum American Express
Rated just below the BMO cards listed above, the
At $399 yearly and with an insurance score of 4.1 out of 5, this card gives you 12 different types of travel and purchase insurance.
Here’s the breakdown:
Best No Fee Insurance
If you are looking for some great insurance, but you don’t want a credit card that has an annual fee of $100 and up, there still are some options.
Any Platinum Plus cards from MBNA would also be great to look into, because all Platinum Plus cards come with 7 types of insurance, and nearly all of them don’t have an annual fee.
Frequently Asked Questions
How do I make a credit card insurance or warranty claim?
How it works is that you open a claim directly with your credit card’s insurance provider when something breaks outside the manufacturer’s warranty but inside your extended warranty period. Then, you simply get the product repaired or replaced through an approved repair facility. Once complete, mail (or fax/scan) the receipt or invoice along with a claim form you will be provided with by the insurer and they will reimburse you by cheque.
How do I make a travel insurance claim?
While you are traveling make sure you have the number for your credit card issuer with you. You can usually just flip over to the back of your card, dial that number, and they will connect you to their insurance partner to open a claim.
Don’t wait until you return from your trip to start the claim process though, be sure to give them a call as quickly as possible and they will guide you through it.
Is anyone else covered by my credit card insurance or is it just me?
It’s pretty common with travel insurance for one or more of your traveling companions to be covered along with you if you charged the travel costs for all passengers to your card.
Multi-person coverage ranges by card as well as by individual type of coverage. Sometimes multiple people may be covered for emergency medical and not baggage delay for example. There is also commonly a group limit for each type of coverage so each person’s individual coverage may decrease if you have a lot of people making a claim.
How soon do I need to report an incident?
There is usually a reasonable amount of time for you to report the incident, often up to 30 days, but it ranges by policy. The best advice is to call immediately as soon as any sort of incident happens and that way you’ll be sure that you’re covered.
Is my insurance coverage automatic or do I need to activate it somehow?
In nearly all cases, coverage kicks in automatically as soon as you charge the full purchase price of an item or your trip to your card. You’ll still want to check your policy to be sure, but this is a pretty safe bet.
In some cases you may even only need to charge 80% or less of the total price to your card to qualify for coverage.
Some coverage is automatic with no purchase required. Emergency medical coverage, for example, often doesn’t require you to pay for your flights or hotels on your card and just kicks in as soon as you leave your home province.
Do I need to read the fine print?
Yes, you most definitely need to read the fine print to know what coverage you have. It’s tedious to do, but there are little details that can be easy to miss.
If you want to be 100% sure you are covered and that you understand what exactly is covered, there is no other way than to actually read the fine print for your specific card.
Am I covered if I’m flying on rewards points?
Unfortunately, the answer to this for most types of coverage is no.
If coverage is automatic without having to make a purchase, then you will still be covered. But, if you need to cancel your plans, return home unexpectedly, have a delayed flight or lose your bags, you most likely won’t be covered.
There are some cards that are affiliated with specific rewards programs that will cover you for rewards flights booked with that rewards program. The TD Aeroplan credit cards are one such example.
You may get lucky and find one or two cards out there that specifically say your reward flight is covered if you charge any remaining taxes and fees to the card. Post in the comments if you’ve seen one like that.
The Bottom Line
Whether you are looking for a no fee card or a premium card that has all the bells and whistles…
Insurance is valuable and should be considered carefully when choosing your credit card.