Credit cards may reimburse you for your pre-paid expenses if your trip is canceled or interrupted. Here’s how trip cancellation and interruption insurance works, what cards offer it and what alternatives are available.
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Everything from hurricanes to health issues can disrupt your travel plans.Credit cards may provide some peace of mind by reimbursing you for your pre-paid expenses if your trip is canceled or interrupted. However, the coverage has become harder to find in recent months.
Citi, which has been providing up to $5,000 of trip cancellation and interruption insurance, is eliminating the coverage, as well as other perks, including car rental insurance, travel accident insurance and baggage delay protection, for many of its credit cards. The change applies to purchases made on or after Sept. 22, 2019.
The company “continuously evaluates our products to ensure that associated benefits best meet the needs of our customers,” and is eliminating the coverages, “so that we can continue providing key benefits that our customers use and value most at no additional cost,” Citi says.
However, American Express announced in late September it would be adding trip cancellation and interruption insurance to six of its travel cards starting Jan. 1, 2020.
See related: Best credit cards for travel insurance
Call your issuer before you book travel
Citi’s move underscores the need to check your credit card before you make a travel purchase to see whether you have trip cancellation and interruption coverage. If you do, you should check to see how much it covers, and under what circumstances the coverage kicks in.
Typically, “if credit card companies do actually offer trip cancellation or trip interruption insurance, it’s very restricted and very limited,” says Erin Gavin, product analyst for the travel insurance site InsureMyTrip.com.
The company examined nearly 100 credit cards in 2017 to see what travel insurance benefits they provided.
Meanwhile, a poll of more than 2,000 travelers by InsureMyTrip.com in 2017 found 40 percent weren’t sure if their primary credit card offered travel insurance benefits.
“It’s very hard for consumers to stay informed if they use their credit card for travel insurance,” Gavin says.
Because of that, it’s important that you call your credit card company and check your coverage before you book your next trip, she says.
Credit cards that offer trip cancellation or interruption insurance
|Card||Coverage amount||Insurance covers|
|Chase Sapphire Preferred Card||Up to $10,000 per covered trip; $40,000 per year|
|Chase Sapphire Reserve||Up to $10,000 per covered trip; $40,000 per year|
|Chase Freedom||Up to $1,500 per passenger; $6,000 per trip|
|United Explorer Card||Up to $1,500 per trip, $6,000 per year|
|Bank of America® Cash Rewards credit card||Up to $1,500 per trip|
|Bank of America® Premium Rewards® credit card||Up to $5,000 per trip, $10,000 per year|
|U.S. Bank Altitude Reserve Visa Infinite Card||Up to $2,000 per trip|
How trip cancellation and interruption insurance work
Trip cancellation insurance covers you if certain circumstances prevent you from traveling on or before your scheduled departure date and you have to cancel your flight, hotel or other travel arrangements that you’ve already paid for.
Trip interruption insurance kicks in if certain covered circumstances arise while you’re traveling and your trip is interrupted.
“Most credit cards only cover trip payments purchased on that specific card,” says Steven Benna, content director at the travel insurance site Squaremouth.com.
So, if you charge your flight to a credit card that provides trip cancellation or interruption insurance, and your hotel to a card that doesn’t have such coverage, you could be reimbursed for your flight but not your hotel.
You’re likely to be eligible to be covered if you or your traveling companion become injured or ill, severe weather prevents you from traveling or there’s a terrorist incident.
The amount of coverage can vary greatly, from $1,500 to $10,000 per incident, depending on the credit card. So coverage that might be plenty if you’re flying to visit your grandmother in California might not be adequate if you’re taking an expensive trip, like an African safari.
Your credit card also might have an annual limit on trip interruption and cancellation insurance.
See related: How to file a baggage claim with your credit card
Another option: Buy travel insurance on your own
A number of major credit cards, including American Express and Discover, don’t offer trip interruption or cancellation insurance.
If your credit card doesn’t provide such coverage, or you need high limits or a wider range of coverages, you can also purchase travel insurance on your own.
In 2018, consumers spent almost $3.8 billion on travel insurance, according to the U.S. Travel Insurance Association, up 40 percent from 2016. That travel insurance covered more than 65 million people, and 90 percent of the policies included trip interruption and cancellation coverage.
Most policies you purchase are considered comprehensive, and often include such things as medical coverage and reimbursement for travel delays and baggage delays, Benna says.
Travel insurance typically costs between 4 percent and 10 percent of the cost or your trip, according to InsureMyTrip.com.
You can also buy more expensive cancel-for-any reason policies, which typically allow you to cancel your trip for any reason up to 48 hours before your scheduled departure. It will reimburse you for the majority of your pre-paid trip costs.
You should purchase travel insurance sooner rather than later, Benna says. If a hurricane is taking aim at your destination, for example, it’s too late to purchase it.
If you purchase your own travel insurance your credit card trip cancellation and interruption coverage might be secondary, meaning your credit card will cover whatever costs your independent travel insurance didn’t cover.
To cash in on your travel insurance, you’ll need to file a written claim, providing documentation of the costs you pre-paid and the reason for your claim, such as a letter from your physician if you’re unable to travel because of a medical issue, Benna says.
Read the fine print before using your card’s insurance
Your credit card is likely to have certain exclusions so you won’t be reimbursed, such as if you can’t travel because of a pre-existing medical condition, or if your airline or tour operator cancels your trip other than for extreme weather or a strike.
“Consumers should be very wary of using credit cards [for trip interruption and cancellation insurance] without digging into the details,” Gavin says.