Best Insurance Credit Cards For 2021
Up to 12 types of insurance “just in case.”
You'll never think you really need it until you really need it – insurance is funny like that.
But did you know that many credit cards come with built-in insurance?
Some will cover you for your purchases, your travels, your rental car, and even damages to your cell phone.
Added insurance comes in handy when you least expect it. Let's take a more detailed look at what your credit card might offer.
Credit card purchase insurance
There are 4 different kinds of purchase coverages available.
Extended warranty
Extended warranty will prolong the manufacturer warranty on a product for an extra period of time, usually doubling the manufacturer warranty for up to 1-2 years.
For example, if your product warranty only covers you for 6 months, charging the purchase to your credit card will double that warranty to 1 year.
Purchase protection
This type of coverage will protect nearly anything you've purchased from accidental damage or loss. This can range from 90 to 120 days.
Price protection
Price protection is an interesting perk. It will cover you if an item you bought goes on sale for a lower price within a set period of time, usually 60 to 120 days after your purchase.
For example, say you buy a pair of jeans at $80 and one week later it's advertised at a lower price. You're able to submit a claim and get reimbursement for the difference in price.
Return protection
Return protection provides coverage if a retailer won't accept a return within a set number of days. You'll be able to submit a claim for a statement credit.
Credit card travel insurance
The last thing we want to worry about when traveling is "what could go wrong."
But, sometimes it pays to think ahead when it comes to the possible dangers of traveling in a foreign country.
Here are the different kinds of travel insurance offered by some credit cards.
Travel accident
Travel accident insurance makes you eligible for a lump sum payout should you get into a major accident while traveling on a common carrier (like a bus, train, airplane, taxi, etc.) – knock on wood.
The payout usually depends on the severity of the accident (i.e. lost limbs) and can range from $100,000 to $1,000,000.
Trip cancellation
Sometimes, emergencies happen, and travel plans can be postponed.
Sadly, some travel expenses are not very forgiving and wind up being non-refundable.
This is why trip cancellation insurance comes in handy – you can submit a claim to get refunded for those travel expenses.
Keep in mind some issuers are more strict on what can be deemed an "emergency."
Trip interruption
Similar to trip cancellation insurance, trip interruption insurance will come to the rescue should you be forced to change or interrupt your trip due to emergency circumstances.
It will refund you for the cost of changing your travel plans, usually from $1,500 to $20,000 depending on the card.
Flight delay
Flight delay insurance will cover you for meals, ground transportation, personal necessities, or lodging costs if your flight is delayed for a number of hours or days.
Amounts vary usually between $250 to $500, and depending on the card, the payout varies by how many days you're actually delayed.
Baggage delay
Nothing puts a downer on a trip more than delayed baggage.
But with baggage delay insurance, you're able to get reimbursed for the cost of replacing some of the items that have been delayed.
Similar to flight delay, your baggage has to have been delayed for a set time, usually starting at 6 hours.
Maximum reimbursement can range from $100 to $500 and varies by how long your baggage has been delayed.
Lost baggage or stolen baggage
Similar to delayed baggage, lost or stolen baggage insurance will cover you in the event that your baggage is lost or stolen.
The maximum payout ranges from $500 to $3,000.
Rental car theft and damage insurance
Rental car theft and damage insurance, Collision Damage Waiver, or Loss Damage Waiver will reimburse you for damages made to, or loss of, a rental vehicle.
There are 2 key things you have to do in order for your credit card coverage to be valid:
- the full cost of the rental must be applied to the credit card, and
- you have to decline the collision damage waiver provided by the car rental agency.
It's a great secondary type of coverage that you don't have to pay extra for.
One thing to keep in mind, however – there are some coverage restrictions:
- it's only valid for a set period (normally no longer than 30 days),
- it covers a maximum amount (up to $50,000),
- it can't be used in certain countries, which varies by network and issuer,
- it can't be used for certain vehicles, such as moving trucks, cargo vans, or vans that seat more than 8, and
- you can't violate your rental agreement.
Credit card rental car insurance is typically a secondary coverage. If your personal car insurance provides coverage, you have to go through them first with your claim. Afterward, you can go to your credit card for anything not covered by them, which would include any deductible you had to pay.
Mobile device protection
If your cellphone is an extension of your arm like mine is, mobile device protection could be extremely valuable to you.
It will cover your device against loss, theft, accidental damage, or mechanical breakdown for a certain number of years, and up to a set value (often $600).
The catch? In order to qualify, you need to pay for the device entirely using your credit card, or charge the monthly plan to your card.
Make sure you're covered
Insurance may seem unnecessary – until you need it.
You can never be too prepared, and having added insurance is always a great way to have some peace of mind when making a large purchase or going on your next trip.
