In 2020, I was looking forward to leaving Los Angeles for a socially distanced vacation 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 friend and his significant other would stay in one, and my roommate and I would take the other. That was the plan, until one friend tested positive for the coronavirus and had to isolate at home.
When the unexpected happens, a credit card’s trip cancellation or trip interruption insurance may help you recover the cost of nonrefundable expenses. In my case, trip cancellation insurance saved me $1,388. As you make travel plans in the vaccination era, get to know how these benefits can protect your travel fund.
Benefits explained
Trip cancellation and interruption insurance are often found on travel credit cards. A quick look through your card’s benefits can confirm whether you have them. Payment networks like American Express, Visa and Mastercard offer these benefits, and insurance companies underwrite them.
Trip cancellation insurance may reimburse prepaid, nonrefundable travel expenses like airfare, hotels, cruises, tours and passenger fares, depending on the card’s terms. Trip interruption may reimburse the unused portion of your trip for certain covered reasons. Terms vary.
To qualify, you must pay for eligible travel expenses with the card that offers the benefit. If you use credit card rewards to pay for a trip, purchases might still be covered, depending on the card. With Chase, for example, a spokesperson confirms that trip cancellation insurance covers qualifying purchases booked with rewards earned on an eligible credit card.
Benefits like these may also change on credit cards, so to avoid unwanted surprises, review your card’s terms and conditions before booking a trip.
Qualifying circumstances
Insurance offered through a credit card extends to different circumstances. For example, unexpected illness and accidental bodily injury are the predominant cause for trip cancellation and trip interruption claims on eligible Mastercards, said Ralf Riehl, director of loyalty solutions for Mastercard, in an email.
“In specific regard to COVID-19, these benefits do not provide coverage for fear of traveling to a specific destination, even for fear of illness or quarantine,” he said.
The terms I qualified for cited coverage that includes “sickness experienced by you or your traveling companion which prevents you or your traveling companion from traveling on the trip.”
Depending on the card, other circumstances that may qualify for trip cancellation coverage include physician-ordered quarantine, loss of life, severe weather that prevents travel, changes in military orders and jury duty. Trip interruption may cover similar incidents.
Possible limitations
Coverage from your credit card may be secondary to any travel insurance policy you purchased or any reimbursements received from the travel provider or carrier. I had not purchased a travel insurance policy for my planned stay, but the short-term rental service reimbursed cleaning fees and taxes that I’d prepaid.
It’s generally good practice to book stays with a flexible cancellation policy during a pandemic, but I made an exception since side-by-side cottages were hard to find at a decent price.
It’s also worth noting that travel benefits on your card typically cover only up to a certain amount per person, for a maximum amount per year. If a trip exceeds your benefit’s limits, consider purchasing a travel insurance policy.
Christina Dwiggins, content creator at travel blog Our Sweet Adventures, was spared by having these card benefits and an insurance policy 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 it, and we had extended hotel nights because my sister was with us,” she says.
Her credit card’s travel insurance reimbursed the difference in price between flights. The separate travel insurance policy she’d taken out also covered medical expenses and other travel-related expenses.
The claims process
Requirements are typically found in your card benefit terms. Submitting a claim online or by phone with the benefit administrator is essential to getting reimbursed. There’s typically a small window after you cancel travel plans. My terms allowed 20 days to submit a claim for trip cancellation insurance.
The online form was not user-friendly, as it was tailored for flight cancellation claims. A quick call to the number listed in the terms connected me with a representative, who offered a workaround.
Evidence is also a requirement in this process. I provided general information, as well as:
• A credit card statement that showed proof of purchase
• A brief reason for the cancellation
• Screenshots of receipts and the cancellation policy
• Proof of my cancellation
• Copy of my friend’s test results
I specifically mentioned that a travel companion became sick with COVID-19 and that another had to be quarantined after having contact with them.
In about a week, I received an email saying my claim was approved. After that, it took another week to receive a check in the mail. Not bad for a perk on a no-annual-fee travel credit card.
Melissa Lambarena is a writer at NerdWallet. Email: mlambarena@nerdwallet.com. Twitter: @lissalambarena.