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When comparing premium cards, don’t forget to eye insurance perks

Elite rewards cards tend to have the highest annual fees, but they also offer generous side benefits

Summary

Premium rewards cards that charge big annual fees have soared in popularity thanks to their ultra generous rewards programs and high value perks. But don’t forget to also look at the cards’ quieter – and potentially more lucrative – side benefits, such as purchase protection and car rental insurance.

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Premium rewards cards that charge big annual fees have soared in popularity in recent years thanks to their ultra generous rewards programs and high-value perks, such as free travel credits or companion passes, airport lounge access and other luxurious freebies.

But before you reject or settle on an offer, don’t forget to also look at the cards’ quieter – but potentially more lucrative – side benefits, such as baggage insurance and trip delay protection, car rental insurance, cellphone protection and more.

Although they rarely get as much attention as splashier card perks, the insurance benefits you get from a premium card could potentially save you significantly more money over time. For example, if you lose your phone, get stranded at an airport or wreck your car rental, you could get reimbursed hundreds more than you even paid to own the card.

If you take the time to scan the cards’ benefits, you’ll also find that cards that charge especially big fees, such as the Chase Sapphire Reserve, the Citi Prestige card, the Platinum Card® from American Express and the U.S. Bank Altitude Reserve Visa Infinite Card, tend to offer the most generous side benefits. Meanwhile, less expensive premium cards, such as the Chase Sapphire Preferred Card, also offer hundreds of dollars worth of coverage.

See related:  9 travel-related fees, perks your rewards card may cover for free

Elite cards are more generous with cellphone and purchase protection

Citi, for example, recently released details on the cellphone protection perk that it’s adding to its newly revamped Citi Prestige card. Although it’s hardly the first card to offer insurance protection for cardholders afraid of breaking their phones, the Citi Prestige card’s cellphone protection benefit is, by far, one of the most generous.

According to The Points Guy, for example, Citi will reimburse Prestige cardholders whose smartphones have been stolen or damaged up to $1,500 per year (and up to $1,000 per claim) as long as they pay their monthly cellphone bills with their card. Other cards that offer smartphone protection, by contrast, such as the Uber Visa Card and the U.S. Bank Visa Platinum Card, cap their protection coverage at $1,200 per year and $600 per claim.

Similarly, the purchase protection on the Chase Sapphire Reserve card and the American Express Platinum card are substantially more generous than what you’ll find on less expensive cards. Both cards, for example, offer up to $50,000 in annual protection (or $10,000 per claim) for damaged or stolen purchases.

The Amex EveryDay® Credit Card from American Express, by contrast, only lets cardholders claim $1,000 per purchase. Meanwhile, the Chase Freedom card lets cardholders claim a maximum of $500.

See related:  Purchase protection benefits: What they are, how to use them

Some less-expensive rewards cards also have you covered

You don’t necessarily have to pay three figures a year to benefit. Less expensive premium cards, such as the Chase Sapphire Preferred, also offer meaningful protection benefits. However, they tend to be less generous than higher-end cards.

For example, the Chase Sapphire Preferred card offers primary rental car coverage – which can be tough to find on other rewards cards, which more frequently offer secondary coverage. It also offers baggage delay and lost luggage protection, trip cancellation and interruption benefits, as well as cash back when your trip is delayed.

These types of benefits can add up to huge savings if your baggage is lost or your flight is unexpectedly cancelled. For example, if your flight is delayed by more than 12 hours or you’re forced to stay in a hotel, the Chase Sapphire Preferred card will give you up to $500 to pay for your hotel room, meals and other “reasonable expenses.”

That’s not bad for a card that only costs $95 a year to own.

See related:  11 credit card travel insurance benefits

What to look for when comparing premium rewards cards

If you’re willing to pay $450 instead, you’ll get even sweeter perks through the Chase Sapphire Reserve card. For example, the Sapphire Reserve card offers trip delay coverage after just six hours of waiting for your flight.

Benefits on premium rewards cards tend to vary by card. So it’s worth taking a close look at the cards’ benefits pages and comparing them to cards with comparable fees. Some cards, such as the Chase Sapphire Reserve, offer superior rental car insurance, but don’t offer other perks such as cellphone insurance. Others offer a huge range of side benefits if you’re willing to pay a big fee.

Some benefits to look out for when comparing premium rewards cards include:

  • Cellphone coverage. Currently, the Citi Prestige card is one of the only premium cards to offer this protection. However, other cards could follow if cardholders demand it.
  • Car insurance coverage. This is a benefit that tends to vary widely by card and so it’s worth looking closely at a card’s benefits guide before using it to pay for a rental. In general, you’re better off looking for a card with primary coverage since that allows you to make a claim without tapping your personal car insurance first.
  • Trip cancellation or interruption protection. If you have to cancel or cut short a trip because you’ve fallen ill or severe weather has made it dangerous to travel to your destination, you may also be able to tap into your card’s trip cancellation or interruption insurance. Like other card benefits, coverage will vary widely, depending on the card. A high-end card, for example, might reimburse you up to $10,000, while a less expensive card will only cover $5,000.
  • Trip delay protection. It can be stressful getting stranded in an airport or other travel destination through no fault of your own. Trip delay insurance can help take the financial sting out of an unfortunate delay. However, this kind of benefit is typically only available on cards with annual fees.
  • Baggage insurance. Baggage insurance is another headache-reducing benefit that’s more easily found on premium cards with significant fees. If your card offers it, then you could potentially be reimbursed hundreds of dollars for lost or delayed luggage – a nice perk when you’re flying on an airline with a reputation for losing track of checked baggage more frequently than others.
  • Purchase benefits. Premium cards also tend to offer better purchase benefits, such as purchase protection, return protection and extended warranty.

Bottom line

Don’t forget travel insurance and other side benefits when comparing cards – especially if you’re willing to pay an annual fee.

These benefits are rarely advertised as aggressively as other card perks. But they could wind up being significantly more valuable overall.

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Published: March 26, 2019

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