Most credit cards, especially the premium ones, have plenty of insurance policies included that protect the cardholders purchases in the event of loss, damage, accident or illness.
Often times consumers aren’t aware what their credit card actually includes and that it also covers everyday mishaps such as casually damaging or losing an item previously purchased with the card.
Even among seasoned travelers and credit card users often misunderstand what can be claimed and in many cases people react astounded when you tell them that you just lost something and intend to claim it with the credit card company.
There are several types of insurance commonly attached to credit cards:
- Car Rental Protection (CDW, can be Primary/Secondary)
- Travel Protection (Accident/Baggage/Illness/Trip Interruption)
- Cellphone Protection
- Return Protection (If a store refuses to return an item)
- Purchase Protection (Covers the purchased item against Loss/Damage/Theft)
- Extended Warranty (Covers the items for up to x months beyond the manufacturers warranty)
The way these claims work differs by card issuer and insurance underwriter. Generally speaking I find that American Express claims are easier than those made through Chase, Citi et al and their insurance partners.
One insurance I have so far used most often is the Purchase Protection with American Express. Purchases are covered when they’re accidentally damaged, stolen, or lost for up to 90 days from the purchase date with an eligible AmEx card.
In order to be covered the purchase has to be made with the card (online or at a brick and mortar retail store) and the benefit is available with many Amex cards, it’s not an exclusive Platinum feature. Although I found that claims under the Platinum card are managed and approved in a more liberal fashion than other cards.
There is nothing wrong with claiming things that sound very stupid as life is mostly about stupid things when something goes wrong. Last week I bought a pair of sunglasses at Nordstrom Rack. Actually quite a good deal at $30 but little did I know I would somehow lose them a couple days later. Of course that’s my fault but since it’s covered under the purchase protection it’s a legitimate claim.
In the past I have filed:
- Baggage Insurance claim with Chase Hyatt Visa
- Stolen beach bag including shoes with American Express
- Stolen/Removed Swimwear with American Express
- Stolen suitcase with Commerzbank / Allianz
These cases have all been resolved in the end but some took more effort than others. Amex claims were all easy and quickly done. Chase took longer and had a lot of changing hands involved. Commerzbank/Allianz was an absolute nightmare to deal with and I had to get a regulatory agency involved.
Here is a case I submitted to Amex in late summer that I previously covered:
Using The American Express Platinum Purchase Protection: Swimwear Stolen At The Hotel Pool
The reimbursement was only US$42 in that case as well but if something happens 2-3 times a year then even small reimbursement amounts add up.
Most credit cards come with the basic rental car protection but the devil is in the detail here as well. Some cards including the U.S. Amex Platinum only provide secondary coverage so in case you have your own car insurance policy that would be your primary go to point.
You can avoid that by enrolling in the paid Premium Car Rental Protection plan which also has slightly better coverage or by going straight to the Chase Sapphire Reserve.
One thing that unfortunately went away is Price Protection, a feature that had your back on purchases when the price dropped and you found the same item elsewhere at a lower price. Many people have really milked this feature and I guess at some point the banks decided that it’s a loss maker so they pulled it.
It’s always worthwhile to actually read the product description and benefit table of a new credit card entirely to understand exactly what you’re entitled to if something bad happens. Many of these premium credit cards come with substantial annual fees of $500-700 and if you manage to get a few mishaps over the year covered that could mean a lot of the fee is being shaved off.
With cards adding more and more benefits that are often not relevant to many consumers it’s even more important to understand and take advantage of the coverage.
Have you successfully used credit card insurance cover in the past?