Credit Card Insurance Won’t Protect You From Coronavirus Changes?

Can credit card travel insurance help flyers recover pre-paid travel reservations? A recent report from the Wall Street Journal suggests that while it can help in certain situations, the Coronavirus situation may not necessarily qualify for trip cancellation aid.

The Trouble with Trip Insurance

Many travel-oriented credit cards offer travel insurance to cardholders who either use the card to purchase a portion of their travel, or purchase their travel in full using the points earned from those cards. While Chase is a prime example of companies pointing to travel insurance as a key benefit, competitors Citi and Discover have quietly dropped the benefits from their cards.

As Coronavirus and directives from the White House have forced travelers to reconsider their travel, many flyers are finding their travel insurance plans are limited as to what they will cover. For example: the Journal noted the story of a graduate student who paid for a class trip to Sweden using their Chase Sapphire Reserve card. When the trip got canceled, they tried to file a claim using the travel insurance, just to find out “the card’s benefit didn’t cover the Coronavirus.”

Another business traveler told the newspaper they booked a hotel for a business trip using their American Express Platinum Card. When the hotel wouldn’t refund her total room rate, the travel insurance offered through the card wouldn’t give her a refund unless she was contracted with Coronavirus and was under a quarantine order.

What Does Credit Card Travel Insurance Actually Cover?

The coverage level of credit card travel insurance varies from card to card. It all depends on what is in the Guide to Benefits for the specific card.

For the Chase Sapphire Preferred, there are several situations excluded from filing a trip cancellation claim. These include:

• Disinclination to travel due to civil unrest,
• Your disinclination to travel due to an epidemic or pandemic,
• An act of war, not including terrorism

As of press time, Chase did not make a Guide to Benefits available for the Chase Sapphire Preferred.

American Express issued a statement on Mar. 6, 2020, in regards to trip cancellation due to Coronavirus. Their statement reads:

“The Trip Cancellation and Interruption Insurance benefit covers specified Covered Losses. Fear of traveling due to sickness, epidemic, or pandemic (such as the Coronavirus) is not a Covered Loss under your American Express Trip Cancellation and Interruption Insurance benefit”

Because “disinclination to travel due to an epidemic or pandemic” is on the exclusion list, travelers who cancel their travel may not be able to seek relief over the Coronavirus. On Mar. 11, 2020, the World Health Organization declared the spread of COVID-19 a “pandemic.” Thus, the travel insurance specifically excludes any cancellations due to that event.

However, illness is still covered by travel insurance from the Chase Sapphire Preferred. Under the section on covered losses, the following conditions apply:

• Accidental Bodily Injury, Loss of Life, or Sickness experienced by You or Your Traveling Companion which prevents You or Your Traveling Companion from traveling on the Trip,
• Accidental Bodily Injury, Loss of Life, or Sickness experienced by an Immediate Family Member of You or Your Traveling Companion when the Accidental Bodily Injury or Sickness is considered life-threatening, requires hospitalization, or such Immediate Family Member requires care by You or Your Traveling Companion.

According to that clause, if you or an immediate family member were to be infected by Coronavirus, you could file a claim for trip cancellation benefits. Before filing any claim, be sure to read your guide to benefits to see if your situation qualifies for a claim.

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