As summer travel season approaches, you might be pondering a big trip to an exotic island, or climbing Mt. Kilimanjaro, or anywhere else you have dreamed of visiting.
Bear in mind when you do travel, you might also be wondering about purchasing travel insurance for your vacation. It is something to consider for peace of mind, according to some experts.
Did you know Americans spent almost $2.8 billion on travel insurance in 2016, a 19% jump from 2014 according to the U.S. Travel Insurance Association. Travelers typically pay 4%-10% of their trip costs for a trip insurance policy, so insuring a $5,000 trip could cost $250-$500. Rental car insurance coverage from car rental companies could add up to $30 per day to the cost of your rental car bill.
According to a new study by CompareCards.com, almost HALF of Americans overlook the valuable insurance and protections ALREADY offered on the credit cards in their wallets! CompareCards surveyed 1,050 Americans who have a credit card and traveled last year or plan to this year and asked them about their experience with credit card protections and insurance.
Here are some interesting findings:
- Nearly half of Americans (47%) fail to take advantage of valuable benefits that come with their credit cards. Travelers may already be insured for some of these travel issues through a credit card they carry in their wallet.
- No doubt, credit card protection and insurance terms can be confusing. Yet, those who wade through the details and file a claim are richly rewarded. The average size of claims totaled just over $1,500 and 76% of those who filed a claim were fully compensated, the survey found.
- Only 53% of credit card holders report taking advantage of valuable credit card protection benefits.
- Americans utilize purchase protection most often at 46%
- Followed by car rental collision coverage at 37%
- Another 35% use cards to get reimbursed if they find a lower price elsewhere on a purchase they recently made.
Credit card claims yield a big return
- The average size of the credit card benefits claim totaled an impressive $1,530, the survey found.
- A majority, or 76%, of customers who filed claims reported being fully compensated for their claim.
- 85%, who filed a credit card benefit claim didn’t experience a problem.
- More than two-thirds (68%) of cardholders are confident about relying on credit card coverage in the future. In fact, among those who did file a claim, 79% said they would rely on coverage in the future.
Wondering what you may be missing out on? “If you aren’t aware of the protections that your current credit card offers, go online and search for the official guide to benefits from your issuer,” said Thomas Donaldson, senior credit card analyst at CompareCards.com. Here’s a brief overview on some of the benefits you may find:
- Cellphone protection. Credit cards offer various levels of purchase protection, extended warranty, rental car collision insurance and trip cancellation insurance
- Auto rental insurance. Credit card auto rental insurance typically comes in two flavors: primary and secondary.
- Primary rental car insurance is big for anyone who travels regularly.
- Secondary collision damage waiver insurance is a more common credit card benefit and will typically only kick in after you have filed a claim with your own insurance company.
- Trip cancellation protection. Your bags are packed. Then, you get sick. Or, a blizzard shuts down your airport. A premium travel credit card could come to the rescue with trip cancellation insurance. Expect to find trip cancellation insurance only on travel rewards cards with an annual fee.
- Lost/delayed baggage coverage. Protections vary by card. On covered Citi cards, for example, if your checked baggage is delayed by six hours or more, you may be eligible for up to $100 in replacement items. For a lost bag, you are covered for up to $3,000 per covered traveler ($2,000 per bag for New York residents).
- Price protection. When you are on the hunt for a bargain, it can be frustrating when you see a lower price after you buy an item. Price protection, a benefit offered on some credit cards, can fill that gap.
Read the full survey findings on CompareCards.com.