How it began, heaven knows. But a great many rumor-mongers are telling their neighbors that they can obtain free-of-charge travel insurance for their next trip by simply signing on for the right kind of credit card. I was a target for that kindly advice on our recent radio travel show. One listener after another phoned in to say that if you equipped yourself with a certain brand of credit card (I'll name it later), you would automatically receive a travel insurance policy applicable to your next trip and supplying $5,000 of coverage--all for paying nothing in addition to the standard fee for owning a credit card.
In the fierce rivalry between credit card issuers, companies have vied with one another to provide more and better "benefit enhancements". One such firm--the aggressive Capital One--was a pioneer years ago in announcing that it would not charge a 3% foreign transaction fee to users of its card. Another firm, American Express, has for decades promised its credit card holders that they need not pay for collision damage waiver when renting a car (most credit cards now do the same). Still other airline-associated credit cards are loudly proclaiming that their card holders can avoid the $25 per suitcase charge each way for checking their luggage aboard a flight, if they pay for those flights with the right credit card.
And in that tradition, Chase Bank--largest issuer of credit cards in America--has recently announced that starting November 1, they will provide a greatly-enhanced form of travel insurance (increasing the coverage that was earlier offered) for no extra charge to persons who use certain Visa credit cards issued by Chase. Therein lies the source of the rumor, which has some basis in fact but is also far less promising than some of the enthusiastic rumor-mongers have claimed.
Starting November 1, holders of a popular Chase Sapphire Visa Credit Card, United Mileage Plus Explorer Card, Ink Club and Ink Plus cards, and a number of other specialty Chase cards (but certainly not all of them), will entitle the owner to the following three forms of travel insurance--but only those three:
(1) Trip Cancellation Insurance (reimbursing your expenses up to $5,000, a considerable increase over the $1,500 of coverage that was earlier offered by many such credit cards).
(2) Lost Luggage Reimbursement, covering you for damages incurred because of the loss of your luggage by the airline, or damage to your luggage, up to $3,000 per person (and now including electronics that were earlier excluded from coverage); and
(3) Baggage Delay Insurance, reimbursing you for damages suffered because of the delay in delivering your luggage, up to $100 a day for up to five days (and including return trips, which were earlier excluded).
Those forms of insurance--and they certainly are types of insurance--are valuable "benefit enhancements", and greatly increase the value of your Chase Sapphire Credit Card. But they are far removed from the protections afforded by a standard travel insurance policy. They include not a scintilla of medical insurance, no remote promise of emergency medical evacuation to a capable hospital, nothing at all related to illness, or physical injuries less serious than death or dismemberment, or the like. That listener to my program who called in a mood of great triumph to tell me that it was no longer necessary to buy traditional travel insurance for a trip, was at least 98% wrong.
What Chase has done will obviously be emulated eventually by the other credit card companies. But until they do, the various Chase Credit Cards supplying that protection have a considerable advantage.
But it should be stressed that not all credit cards issued by Chase will supply the $5,000 trip cancellation and $3,000 lost or damaged luggage provisions. The prudent traveler will continue to consider the purchase of travel insurance for a lengthy trip, by consulting InsureMyTrip.com or Squaremouth.com.
