Credit Card Travel Accident Insurance?

Q: I have come across quite a few American Express, Citibank, Capital One, and Chase credit cards with travel insurance included for accidents. Is it any good? Who offers the best coverage?

A: Is it any good? Well, that depends what you are expecting from it. Coverage varies by card and issuer, but usually it works like this:

  • The coverage is automatically provided at no additional cost on eligible travel purchases which were paid for in full using the credit card.
  • The benefit covers accidental loss of life and sometimes, dismemberment (that’s a nicer sounding word for when your limbs or eyes are lost). Usually the loss of life = full benefit value. If dismemberment or other disabilities are covered, then the payout might only be a fraction of the full benefit amount.
  • This is NEVER a blank benefit that covers all forms of travel. As you can imagine, there are plenty of rules and restrictions. Typically, coverage only applies while traveling as a ticketed passenger via “Common Carrier.” If you’re not familiar with that term, here is the definition according to A.M. Best, a leading insurance-rating and information agency:

 “A business or agency that is available to the public for transportation of persons, goods or messages. Common carriers include trucking companies, bus lines and airlines.”

With some credit cards, coverage might extend while traveling to and from the terminal where your trip originates, if getting there is also done via Common Carrier (for example, you might be covered while riding on a bus to get to the airport).

In addition to the card issuers you mentioned, some Discover, Bank of America, and U.S. Bank cards also offer some level of coverage. In fact, most Visa Signature and World MasterCard tier cards issued in the United States offers at least some degree of protection:

Visa Signature

Travel accident insurance is included on eligible Visa Signature cards and here is an excerpt from this PDF document which discusses it:

Visa travel accident insurance

MasterCard World

With Visa, the travel insurance coverage is usually (but not always) the same on all Signature cards. However when it comes to the MasterCard travel insurance for their “World” tier of cards, coverage can vary greatly depending on the issuing bank. The MasterCard website explains it as:

“Covers you and your family against Accidental Death or Dismemberment if you purchase common carrier travel tickets with your eligible MasterCard card.”

Then underneath that, there is an asterisk which goes on to explain how the benefits vary by issuer and card. To find out details, you can call 1-800-MC-ASSIST (1-800-622-7747) or contact customer service for the card’s issuing bank.

And to give you an idea of how much coverage can vary between this tier of MasterCards…

  • The Capital One travel insurance policy reportedly is never higher than $200,000 according to this PDF document for their World MasterCards (and their Platinum MC’s have an even lower maximum of $100,000).
  • The benefits guide from August 2011 for my Citi ThankYou Premier credit card (a World MC) stated my travel accident coverage was up to $250,000.
  • When I looked at the AAdvantage World MasterCards which are also from Citibank, some had the cap set higher at $500,000.
  • Then there is at least one World M.C. from USAA which offered $1,000,000 in underwriting for travel accidents.

Discover

The Discover travel accident insurance is more restrictive, because instead of covering all type of Common Carrier, they only cover travel as a ticketed airline passenger. As I write this review, the coverage ceiling was $500,000 for accidental loss of life. This Discover PDF explains the coverage details. Please note that not all Discover cards have this benefits.

American Express

Most American Express charge and credit cards come with travel accident insurance. The level of coverage varies by the particular card and the bank which issued it: American Express Centurion Bank (AECB) or American Express Bank, Federal Savings Bank (FSB). How can you know which issued your card? It’s in your cardmember agreement, part 1 of 2. Or just call American Express customer service and ask if you don’t have that agreement handy.

Here are some examples, at the time of writing:

  • The no annual fee Blue Sky issued by AECB listed $100,000 in coverage
  • The Premier Rewards Gold Card issued by FSB came with $250,000
  • The Platinum Card came with $500,000.

With American Express, both loss of life and dismemberment is covered. This screenshot was taken at the time of writing from the benefits guide for the Premier Rewards Gold issued by FSB:

AmEx coverage for dismemberment

It this benefit worthwhile?

A lot of people wrongly assume credit card travel insurance provides extensive coverage for their travels, when in actuality, it doesn’t. Since this benefit is mainly for loss of life, it’s really the cardholder’s beneficiaries who are more likely to reap the bounty. Keep in mind there’s so many rules/restrictions and the coverage only applies to certain kinds of Common Carrier travel. Truth be told, if you were in an airline crash and died, your family would probably be able to sue the airline for an amount much more than the credit card travel insurance, anyway.

Conclusion? It’s a nice benefit to have since it’s free, but just make sure you don’t confuse this with travel medical insurance (which is completely different).

Disclaimer

This article is meant to serve as a basic summary of what credit card travel insurance is. Any cards mentioned above are examples only and their benefits may have changed since time of publishing. For benefit information, you need to contact the card’s issuing bank such as Chase, American Express, Citibank, Capital One, Discover, etc. This article is not legal nor insurance advice and should not be misconstrued as such. This article was published August 2011.

 
Comments
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Chances that you die on a commercial flight are like zilch. These benefits are so limited and family members are often unaware that I’d be surprised of Visa or Mastercard have had more than a dozen of these claims in a year.