Credit Cards: What Types of Credit Card Insurance Are Available, Are They Worth It?

Like other insurance coverages, credit cards also provide insurance to the card users. A credit card insurance covers a range of eventualities such as travel delay, trip cancellation, credit card shield and protection against fraud. It is essential to note that a credit card user does not have to pay anything extra to avail this coverage. Because you are a cardholder, you are automatically covered by this insurance.

The insurance offered by the credit card ensures that the user gets the amount equal to the coverage in case any of the eventualities occur.

Here we provide an overview of all credit card insurance policies offered by different card issuers.

In other words, credit card insurance offers different types of protection, often included as benefits for cardholders. These can provide significant value depending on your lifestyle and spending habits.

Common credit card insurance policies are as follows:

1. Travel insurance

A. Cancellation/interruption of the trip: This coverage reimburses prepaid, nonrefundable expenses if your trip is canceled or interrupted due to covered reasons (e.g., illness, severe weather).

b. Travel delay: It covers costs (such as accommodation, meals and transport) if your trip is delayed by a certain number of hours.

c. Lost or damaged baggage: This insurance coverage reimburses the user for lost, stolen or damaged luggage during the trip.

D. Emergency coverage: This insurance cover includes medical costs or evacuation costs if you are injured or become unwell abroad.

2. Purchase protection

It protects new items from theft or accidental damage within a certain period of time (such as 90 to 120 days).

3. Extended warranty

It extends the manufacturer’s warranty on eligible items, typically by one or two years.

4. Return Protection

This allows you to return eligible items within a certain period, even if the retailer won’t accept them.

5. Mobile insurance

This is similar to purchase protection which covers damage, theft or loss of your mobile phone when the purchase is made with the card.

6. Protection against fraud

It limits your liability to zero in case of unauthorized charges or fraud. However, the card issuer could impose some conditions for this coverage to apply.

7. Credit Shield Insurance

In the event of the cardholder’s death, it can be challenging to repay the existing debt. Credit insurance can pay off such debts arising from the use of credit cards according to the predetermined limit.

8. Accident coverage

For example, some credit cards offer additional accident insurance ₹5 or ₹10 lakh to the cardholder.