In 2020 I was looking forward to leaving Los Angeles for a socially distant holiday in San Diego. I had stocked up on food, hand sanitizer, wipes and masks.
To stay safe and distant, I had booked two cottages near the beach with my travel credit card. My boyfriend and his significant other would stay in one, and my roommate and I would take the other. That was the plan, until a friend tested positive for the coronavirus and had to isolate himself at home.
When the unexpected happens, a credit card travel cancellation or trip interruption insurance can help you cover the cost of non-refundable expenses. In my case, the travel cancellation insurance saved me $1,388. As you make travel plans in the vaccination era, learn how these benefits can protect your travel fund.
Travel cancellation and interruption insurance can often be found on travel credit cards. A quick look at your card’s benefits can confirm whether you have them. Payment networks such as American Express, Visa and MasterCard offer these benefits, and insurance companies guarantee them.
Travel cancellation insurance may cover prepaid, non-refundable travel expenses such as airline tickets, hotels, cruises, tours and passenger fares, subject to the terms of the card. Interruption may reimburse the unused portion of your trip for certain covered reasons. Conditions vary.
To be eligible, you must pay the eligible travel expenses with the card that offers the benefit. If you use credit card rewards to pay for a trip, purchases may still be covered depending on the card. For example, with Chase, a spokesperson confirms that travel cancellation insurance covers eligible purchases booked with rewards earned with an eligible credit card.
Such benefits may also change on credit cards, so to avoid any unwanted surprises, check your card’s terms and conditions before booking a trip.
CONDITIONS THAT MAY BE ELIGIBLE
Insurance offered through a credit card extends to a variety of circumstances. For example, unexpected illness and accidental bodily injury are the leading cause of travel cancellation and travel interruption claims on eligible Mastercards. Ralf Riehl, director of loyalty solutions for MasterCard, in an email.
“Particularly with regard to COVID-19, these benefits do not cover for fear of traveling to a specific destination, even for fear of illness or quarantine,” he said.
The terms I qualified for the quoted coverage which includes “illness experienced by you or your travel companion that prevents you or your travel companion from traveling during the trip.”
Depending on the card, other circumstances that may qualify for travel cancellation coverage include doctor-prescribed quarantine, loss of life, severe weather preventing travel, changes to military orders, and jury duty, just to name a few. A trip interruption can cover similar incidents.
Your credit card coverage may be subject to any travel insurance you have purchased or reimbursements received from the travel provider or carrier. I had not taken out travel insurance for my planned stay, but the short-term rental service reimbursed the cleaning fees and taxes I had paid in advance. It’s generally good practice to book a stay with a flexible cancellation policy during a pandemic, but I made an exception as cottages next to each other were hard to find at a decent price.
It’s also worth noting that travel benefits on your card usually only cover up to a certain amount per person, up to a maximum amount per year. If the cost of a trip exceeds the limits of your benefit, consider getting travel insurance.
Christina Dwiggins, content creator at travel blog Our Sweet Adventures, was spared these card benefits and insurance a few years ago when she and her husband were hospitalized while vacationing with her sister in Peru.
“We had to cancel our flight home, rebook and we had extended hotel nights because my sister was with us,” she says.
Her credit card travel insurance reimbursed the price difference between flights. The separate travel insurance she had taken out also covered medical expenses and other travel-related expenses.
THE CLAIMS PROCESS
Requirements can usually be found in the terms and conditions of your card benefit. Filing a claim with the benefits administrator online or over the phone is essential to getting compensation. There is usually a small window after you cancel travel plans. My terms allowed 20 days to make a claim for cancellation insurance.
The online form was not user-friendly as it was tailored for flight cancellation claims. A quick phone call to the number listed in the terms and conditions put me in touch with a representative, who offered a workaround.
Evidence is also required in this process. I have provided general information as well as:
— A credit card statement showing proof of purchase.
— A brief reason for the cancellation.
— Screenshots of receipts and cancellation policy.
— Proof of my cancellation.
— A copy of my friend’s coronavirus test results.
I specifically mentioned that one travel companion got sick with COVID-19 and another had to be quarantined after contacting them.
Within a week I received an email stating that my claim had been approved. It then took another week for the check to be received in the mail. Not bad for a perk on a credit card with no annual fees.
This article was provided to The Associated Press by the personal finance website NerdWallet. Melissa Lambarena is a writer at NerdWallet. E-mail: [email protected]. Twitter: @lissalambarena.
NerdWallet: Travel Cancellation Insurance Explained http://bit.ly/nerdwallet-trip-insurance-cancellation