Comparing coverage

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US travel insurance comparison site Squaremouth has highlighted the key differences between credit card travel insurance and third-party travel insurance, with a view to enabling consumers to benefit from the best option.

When it comes to cancellation benefits, according to Squaremouth, similarities between credit cards and third-party travel insurance are that they can both include trip cancellation coverage and that common covered reasons include illness, injury, death, inclement weather and terrorism. Differences, said Squaremouth, are that most credit cards only cover trips purchased on that card and limit their coverage to a specific dollar amount, typically between US $1,500 and $10,000 per trip. The company also highlighted the fact that third-party travel insurance can cover 100 per cent of trip costs with a much higher maximum dollar amount and that some third-party policies offer the ‘cancel for any reason’ upgrade.

Moving onto luggage benefits, according to Squaremouth, similarities are that, whether from a credit card of third-party provider, travel insurance will typically include coverage for lost and damaged items. Differences, on the other hand, are that: credit cards usually cover a higher amount for lost or damaged luggage, often reimbursing up to $3,000; many credit cards also include purchase protection for items that were purchased on that card within the past 90-120 days; third-party policies typically have a lower benefit amount, between $250 and $1,000 in coverage for lost luggage; and third-party policies can cover items that are lost at any point during a trip, while many credit cards only cover items lost or damaged by a common carrier.

Lastly, regarding medical benefits, similarities between credit card and third-party travel insurance are that medical benefits can be available on some credit cards, but that more comprehensive coverage can be found with a third-part travel insurance policy. Differences, Squaremouth stated, are that: most credit cards don’t include coverage for medical or evacuation expenses; the medical benefits included on third-party policies usually start at $10,000 for ‘emergency medical’ and $100,000 for ‘medical evacuation’; and third-party policies can also offer coverage for pre-existing conditions, including chronic conditions and recent diagnoses, illnesses, or injuries.