Last updated on November 17th, 2021
With the holidays approaching, millions of Americans have already begun making their travel plans to visit friends and family. What happens, however, when these plans fall through due to unforeseen circumstances?
Travel insurance is one of the most popular methods of protecting against the unexpected, ensuring that policyholders receive compensation for their travel-related losses. Two popular forms of travel protection are travel interruption insurance and travel cancellation insurance. What many people don’t realize, however, is that several travel rewards credit cards offer these protections as a perk of membership. But what are these two types of travel insurance, and which credit cards provide them to customers?
What Is Trip Cancellation Insurance?
Trip cancellation insurance is a credit card protection that offers reimbursement for the cost of a trip, should the cardholder need to postpone or cancel their travel plans. While the specifics of what is covered through trip cancellation insurance differ depending on the credit card issuer, these insurance policies protect both the cardhotheir immediate family. Typically, card issuers offer insurance and reimbursement for any of the following events: lder and
- Illness, injury, or death of the cardholder, traveling companion, or a cardholder’s immediate family member
- Jury duty or court subpoena
- Terrorist attacks or flight hijackings
- Severe weather resulting in the cancellation of the flight or trip
- Financial insolvency of a company directly affecting the trip
Trip cancellation insurance covers all non-refundable expenses related to the trip, including flights, hotels, and other such costs. If, however, a cardholder is eligible for a refund, that portion of the trip expenses won’t be covered through insurance.
What is Trip Interruption Insurance?
Trip interruption insurance is similar to trip cancellation insurance in that it offers protection to the primary cardholder, their travel companions (on bookings with the same card), and their immediate family should something occur to cause an interruption or delay in their ongoing travel plans. Unlike trip cancellation insurance, which covers the costs of canceling a trip before departure, trip interruption insurance covers the cost when a trip must be canceled or halted during travel. Commonly cited reasons for making a travel interruption claim include:
- Sudden illness or injury to the cardholder or a family member
- Conflicts with work schedules (suddenly being called back to work)
- Financial issues with the travel company (including insolvencies or bankruptcy)
- Mandatory evacuations due to severe weather
- Terrorist attacks
- Labor strikes in the destination
Credit Cards That Offer Trip Cancellation Insurance or Trip Interruption Insurance
Travel insurance, such as trip cancellation or trip interruption insurance, isn’t something offered by every credit card on the market. Some issuers do not offer any cards that provide these benefits, including Discover cards or Citi credit cards. Here are some of the best travel rewards credit cards that protect you should your holiday flight plans change at the last minute:
United Explorer Card from Chase
Chase is the leading credit card issuer in the United States and offers several cards that offer protection for last-minute changes through both trip interruption insurance and trip cancellation insurance. One such rewards card is the United Explorer Card. The United Explorer Card is co-branded airline rewards credit card from Chase and U.S. carrier United Airlines. The card offers quite a few impressive perks for cardholders, including TSA Precheck or Global Entry application fee statement credits, two complimentary United Club lounge passes each year, priority boarding, and United in-flight discounts – all for an annual fee of $95 (waived for the first year). What we’re here to talk about, however, is the Trip Cancellation and Trip Interruption Insurance that the card provides cardholders. The United Explorer Card covers travelers with up to $1,500 of insurance per trip – up to a maximum of $6,000 per year. While $1,500 might not cover an entire trip (especially should it involve multiple individuals), it still allows cardholders to claw back a sizeable chunk of their potential losses.
Chase Sapphire Reserve and Chase Sapphire Preferred
The Chase Sapphire Reserve and the Chase Sapphire Preferred are two of the most popular general travel rewards cards on the market today, and both offer impressive perks – including travel interruption and travel cancellation insurance. The Chase Sapphire Preferred offers cardholders double points on travel-related costs, including dining, airfare, hotels, and more – plus a 25% bonus on redeeming points through the Chase Ultimate Rewards portal. The Chase Sapphire Reserve, on the other hand, earns triple points on travel-related costs and offers huge travel perks, including complimentary lounge access through Priority Pass and a 50% bonus on redeeming points through the Chase Ultimate Rewards portal. Both cards have annual fees: $95 for the Preferred and $450 for the Reserve. Both cards offer the same level or trip cancellation and trip interruption insurance: up to $10,000 per trip and up to $40,000 per year. These protections are the pinnacle of trip insurance in the Chase travel credit card program, meaning they both offer the best bet for receiving reimbursement for the entirety of the cost of a trip – should the unexpected occur.
U.S. Bank Altitude Reserve Visa Infinite
Like the Chase Sapphire Reserve, the U.S. Bank Altitude Reserve Visa Infinite is an ultra-premium travel credit card with a high annual fee. For the $400 yearly charge, cardholders receive Priority Pass lounge access, complimentary in-flight Wi-Fi vouchers, TSA Precheck statement credits, and discounts on premium rental car and chauffeur services. Cardholders are also protected with up to $2,000 of travel cancellation or travel interruption insurance per trip, with no maximum limit per year. While $2,000 is well below what is offered by the Chase Sapphire cards, for those that frequently travel for work or pleasure, having a card that doesn’t limit how many times you can claim each year is a nice perk.
Bank of America Premium Rewards Card
The Bank of America Premium Rewards Card is another credit card that offers solid travel perks, including up to $5,000 in travel insurance per trip, up to a maximum of $10,000 per year. Beyond the trip interruption insurance and trip cancellation coverage, however, the card also offers 2x points on every dollar spent on travel purchases, plus a very healthy 1.5x points on all other purchases. Cardholders also receive a $100 statement credit towards TSA Precheck or Global Entry application fees and an additional $100 credit for airline incidentals – all for an annual fee of $95.
Always Research Credit Card Protections and Perks Before Applying
The above list of credit cards that offer trip cancellation or trip interruption coverage is in no way comprehensive. Indeed, many other great travel credit cards offer these protections, including the World of Hyatt Card, the IHG Rewards Club Premier Card, and more. Credit cards that offer insurance protections like travel cancellation insurance almost always carry an annual fee. While paying an annual fee may deter many potential applicants, the protections these cards provide more than make up for the cost associated with card ownership. For even the most casual traveler, a $95 annual fee is more than worth it if it helps them recoup their losses after an incident disrupts their travel. As with all credit cards, however, you must do your homework carefully before applying for a credit card so that you get exactly what you need – and nothing less.