Why was my credit card purchase protection claim denied?

Oftentimes, credit cards offer consumers, as a benefit, some protections for purchases they make using their cards. How do these apply?

Reader Glen writes, “I am certain that my claim for purchase protection was administered and denied by the unaffiliated insurance company’s extended warranty division rather than the purchase protection department. The letter of denial of benefits cited that their benefits mirror the original manufacturer’s warranty, and that my damage was not covered under that warranty. How do I resubmit my claim to ensure that it is considered for product protection coverage that is offered by my Chase MileagePlus Explorer card?”

Check out all the answers from our credit card experts.

Ask Poonkulali a question.

What is purchase protection?

Purchase protection covers eligible purchases you make with your credit card for a certain period of time after you buy it. For instance, if you damage the good, or it is stolen, you could be covered by this benefit.

Chase says that its United Explorer Card protects new purchases for 120 days against damage or theft. There is a limit of $10,000 per claim and $50,000 for each account. The benefit will be extended based on the discretion of the issuer’s benefits administrator.

Exclusions to coverage

Such purchase protection plans come with a variety of exclusions, though. For instance, according to Visa, the following exceptions could apply:

• Items that are lost or “mysteriously disappear”
• Articles that are lost while under the care of a carrier such as the U.S. Postal Service
• Claims that arise from normal wear and tear or abuse
• Items that you damage (by altering them, for instance)
• Collectibles or antiques
• Damage caused by “vermin”
• Plants and animals, as well as “consumables” and “perishables”
• Products that you buy to resell or for commercial use (except if the item is for your own professional use)
• Instances in which you failed to exercise due diligence to avoid the damage
• Damage to or theft of cameras, jewelry or recording equipment in baggage may not be covered
• If the loss arises from confiscation by a public official or customs authority

What is an extended warranty?

You may have had the experience of damaging an electronic appliance just after the manufacturer’s original warranty expires. That’s when a card issuer’s extended warranty would be useful. The United Explorer Card extends a U.S. manufacturer’s warranty by an additional year on eligible warranties that run three years or fewer.

You might have to register with the program’s benefits administrator, sending it your sales receipt and original warranty, to get the benefit of extended warranty protection. That way, you could get immediate assistance in case you need the coverage.

There tend to be exclusions to extended warranties, too. For instance, SRI Federal Credit Union explains that its card’s extended warranty program will not apply for:

• Vehicles with a motor, such as boats and aircraft, that can be towed by another motorized vehicle
• Costs that the terms of the original manufacturer’s warranty do not cover
• Items that you bought with the intention to sell, or for commercial use
• Computer software
• Medical equipment
• Items such as garage doors or garage door openers that will become a part of real estate
• Computer software
• Medical equipment
• Items bought on a purchase plan or those that are leased or rented
• Used items

Follow up on purchase protection claim

A representative for Chase did not respond to a query seeking comment on Glen’s matter. It seems, however, that there are multiple exclusions to both purchase protection coverage and extended warranty coverage, as is typical in a lot of insurance situations, leading to jokes about “Swiss cheese” insurance.

Glen, you should follow up with your issuer’s purchase protection department and ask them for the specific procedure to resubmit your claim. Then you should follow that process, making sure to dot your “i’s” and cross your “t’s” so that there is no oversight that could come under bureaucratic scrutiny.

Bottom line

It seems purchase protection and extended warranties apply under specific situations and come with multiple exclusions. Before you submit a claim make sure that you are applying for the right coverage and following all the administrator’s procedures. Otherwise, your claim is at risk of being rejected.

Glen, I hope your resubmission process goes well and you actually get the benefit of your purchase protection coverage without being subjected to a runaround.

Contact me at pthangavelu@redventures.com with your credit card-related questions.