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Credit Card Insurance – Why It Isn’t Right For Everyone

These days, it’s not hard to find a decent credit card with insurance benefits. Rental car insurance has been a staple on high end cards for decades and in the last few years many cards have even offered extended warranty insurance on your purchases.

For travellers, they’ve recently upped the ante and many are now providing travel insurance as a benefit to cardholders. These make the  higher end cards much more economical when you factor in everything that these cards now offer.

We’ve been lucky to be able to review some credit cards that include travel insurance on this site and have discovered that there really is a card for every budget.

Credit cards and travel insurance



No matter which card you choose, getting a credit card with travel insurance perks can be a great money saving idea. Not only can it be cheaper than purchasing stand alone insurance but you can also get rewards that will let you travel sooner and for cheaper. For those that choose the cashback route rather than the rewards, putting  the money you get back into your travel fund can let you reach you travel goals even faster.

Regardless which plan or card you choose, there’s a few things you need to know before heading off on your travels.

The Limitations of Credit Card Travel Insurance

The first thing is realizing that most credit card travel insurance plans are underwritten by a traditional travel insurance company. Your card may be BMO or RBC or Scotia Bank, however in all likelihood, that’s as far as it goes. More often than not the cards are underwritten by large companies like Manulife or TIC.

That in itself isn’t necessarily a bad thing (and in some cases can be a good thing) however you have to realize that a lot of the same conditions apply as purchasing travel insurance. Depending on your card, you might not be covered for extreme sports or even for something as common as snorkelling. Even entering a country on the Canadian Government Travel Advisory page that’s marked as unsafe could exclude coverage.

On top of that, depending on your card you might not be covered for pre-existing conditions or even be covered at all if you’ve been admitted to a hospital or had a change in your health in the past 6 months. That’s why it’s just as important  to choose the right credit card as it choosing a travel insurance policy. It also vital that you read the fine print on your card before jumping on that plane to exotic lands.

Important: Some credit cards only offer accidental death insurance, which does not provide medical travel insurance if you become sick or injured on your trip.

If you already own a card and are about to travel, it might be worth a quick call to your card provider to ensure that you and any dependents are properly covered for the duration of your trip. Just because it’s included as a perk doesn’t automatically mean that you’re covered if something goes wrong.

Credit card insurance can be a great thing for a lot of people but just like traditional travel insurance, not every card is right for every traveller.

*As always, the information on this page is from one Canadian traveller to another. We have spent years abroad and have gotten to know the ins and outs of the industry however we are not travel insurance agents. If you have any travel insurance questions, please talk to a qualified travel insurance agent or broker. Finally, policies and plans can and do change all the time, without warning, so always consult your insurance policy since that is the legal document to which you are agreeing to.
*This article is only intended as general advice. Please check your own policy carefully.

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