Credit cards are not only for spending money, but when used correctly can help you save through reward points. However, this is really only a small fraction of the benefits offered. Nowadays, most credit cards, even zero annual fee cards, have a variety of lesser-known features that can help you save your hard-earned money. Among the lesser known benefits of a credit card, these free insurance benefits are probably the least used. The following sections will discuss how you can save with these free insurance benefits.
Cell phone replacement coverage
We live in an age where every new mobile phone is more expensive than its predecessor. Damaging or stealing your phone in this way can greatly affect your budget. Now, several credit cards have a cell phone replacement coverage feature, which is used when you pay your monthly mobile phone bill using the right card. With this free coverage, you can protect your device from theft or damage every month when you use your card to pay your mobile bill. There are certainly some limitations on coverage, such as the deductible size, the maximum coverage limit, the limited number of claims per year, and the non-coverage in the event of a device loss. Even with these restrictions in mind, your savings would be substantial if you had to buy a new phone due to theft or damage.
Traveling helps you relax, and while no one wants to get in trouble during the holidays, unexpected things sometimes happen. The free hotel insurance coverage offered by multiple card providers can really help if your property is stolen from your hotel room. This protection applies until the room is fully paid with a valid credit card. Some card providers offer this discount only at local hotels, while others may allow this discount even in international locations.
Airplane baggage tracking technology has improved dramatically over the years, but from time to time, checked baggage still disappears, gets in the wrong place, or gets damaged in transit. Multiple credit cards will compensate you for such baggage loss / damage, but in order to reap these benefits, you need to use the right card to buy your plane ticket. There is also a related insurance claim – baggage delay insurance. This feature compensates for items in your luggage that you may need to replace due to delayed luggage delivery or the loss of your suitcase to the wrong airport.
Accident Travel Insurance
Insurance is concerned with planning for the worst situation and you may be entitled to compensation for accidents that occur during your trip. Many of the leading credit card providers offer their cardholders free travel accident insurance if the card is used to book travel / airline tickets. However, there are some limitations to this benefit that vary from card to card so the cardholder should consider having a more comprehensive disability and life insurance policy.
Travel cancellation insurance
Unpredictability is an integral part of life, and sometimes illness or emergencies can force you to cancel a trip that was planned and paid for months ago. Often you have to cash out a lot of money to make these cancellations. But if your card includes a travel cancellation insurance benefit, you may be able to recover these cancellation fees, at least partially. Obviously, in order to receive this service, you must complete your order using the right credit card. Some of the key limitations to this benefit include the definition of “emergency” that may be different for each card issuer, as well as the upper limit of the total amount that you can claim in lieu of cancellation fees.
Car rental insurance
This is probably the best known among the various free insurance benefits provided by today’s credit cards. In fact, this is one of the key features that a prospective applicant gets when applying for a credit card that offers travel benefits. There is an option to purchase separate insurance for your rental car, and free credit rental insurance is not available upon purchase. However, buying a separate rental insurance cover can be quite expensive, while you can get it for free with the right credit card to book your rental car.
Things to keep in mind when using a free insurance claim
When using an insurance product, there are a few conditions that you must meet before you can pay claims from the insurer. While some of these terms and conditions, such as the definition of “accident” when a trip is canceled, may differ from one card to another, the definition of a “stolen” item will probably be similar no matter which credit card you use. Here are some key facts to keep in mind about your free insurance claims:
- The card provider and your free insurance provider are not the same. Insurance benefits on your credit card are set by a separate entity who will handle your claims with your card issuer acting as an intermediary.
- There is no need to expect immediate compensation. As with any other insurance claim, there is a waiting period for your claim to be processed. So be patient.
- Before using it, make sure you understand the specific terms and conditions. With certain options such as car rental insurance, having a free car rental discount by talking to your current auto insurance provider / card company can save you a lot of trouble in the future.
- The key documents / information you should provide to your card issuer / designated authority to file a claim would be proof of loss, description of damage / damage, amount / type of loss, proof of payment method, etc.
These free insurance benefits on your credit card can help you save a great deal, and while these benefits cannot replace your total life or health insurance value, every penny you save is as good as the penny you earn!