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LESSON 17

Getting Free Travel Insurance, And How To Get Better Coverage

 

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Updated, June 2, 2020

What You’ll Learn In This Lesson

How to get free travel insurance.
Why families should consider paid travel insurance.

I used to think travel insurance was ridiculous. In more than 25 years of traveling across 35 countries, I had never missed a flight, never had my belongings damaged or stolen, and never gotten seriously sick or injured.

Then I had kids. And then one of these kids got really sick on a cruise ship in the Caribbean.

Between the ship’s medical center and an emergency room on Grand Cayman Island, I was left with a bill that was more than $3,500–more than the cruise itself.

Thankfully, I had paid for the cruise deposit with my Chase Sapphire Reserve® and filed a claim for emergency medical care. But because the medical coverage on the Chase Sapphire Reserve® capped at $2,500, I was stuck with the rest of the bill.

That trip, I went from never bothering with dedicated travel insurance, to making sure we always travel with a paid travel insurance policy.

I’ll explain why in a bit, but for now, let’s take a step back and review what travel insurance covers.

How Travel Insurance Protects You:

Here are a few ways in which travel insurance will cover you–but note that not every policy will provide every benefit.

  • The cost in cash or points of your trip if it is canceled (i.e., before it starts) or if it is interrupted mid-trip by a covered reason.
  • Travel delays by a common carrier, usually six hours and more.
  • Loss of or damage to baggage, and delays of baggage, usually by more than 24 hours.
  • Loss of or damage to a rental car. This usually excludes liability to third parties.
  • Emergency medical and dental care.
  • Emergency medical transportation and evacuation. This is a black swan event–rare but potentially devastating from a health and wealth standpoint.

There are many different policies from different credit cards, airlines, online travel agencies, and travel insurance companies, so it can get confusing.

It took a while to figure most of it out, but for many people, combining the free travel insurance of credit cards with that of a reasonable paid plan would yield the maximum coverage for the least amount of money.

Free Travel Insurance With Credit Cards

For everything excluding emergency medical and dental care and emergency medical transportation, the cards below are pretty good.


Sure, the annual fee may be hefty, but the reimbursements for benefits that cover what are essentially inconveniences are good enough. And the coverage is free as long as you paid for part of the trip with the credit cards.

With the Chase Sapphire Reserve®, the primary coverage for car rentals is an uncommon benefit – most credit card coverage is secondary, meaning they only pay what your personal policy does not.

But for the big scary medical emergencies, the free travel coverage from credit cards do not meet the grade. For that, I turn to paid travel insurance to plug the gap.

Paid Travel Insurance Protects Against Medical Black Swans

Allianz Travel Insurance

Remember the $2,500 cap in medical coverage by the Chase Sapphire Reserve® that I had? Yeah, that didn’t go very far at all in a medical emergency abroad, and that was a real bummer.

It’s why I turn to paid travel insurance, but as with everything in my life, I make sure to optimize these policies to get the most protection for the lowest premiums.

A quick search will show up several travel insurance providers in the market. I’ll focus on just one – Allianz – which I’ve had great personal experiences with.

When you stack the free coverage from a premium card against the Allianz plan, you’ll be getting up to 10x the emergency medical coverage at $25,000.

In case of a black swan event and you or your family need to be evacuated for medical emergencies, the Chase cards provide up to $100,000 in coverage. Allianz covers you for $500,000 per person.

The travel optimizer’s guide to saving money on an Allianz plan

Here’s the best part: the medical coverage from Allianz remains constant regardless of how much you estimate the value of your trip is.

In three quotes below, we have three trips for a single traveler, each valued at $1,000, $10,000, and $100,000. The premiums for the policies reflect the estimated cost of the trip, and so does the benefit for trip cancellation and trip interruption.

But the red box shows that the coverage for emergency medical and emergency medical transportation is unchanged.

Save on premiums on trip cancellation and interruption

If you low-balled the estimated cost of the trip when getting an Allianz quote, you may not get much coverage for trip cancellations or interruptions, but you would still get the oversized emergency medical protection.

I usually just go with a $1,000 quote, because all I really care about is the medical coverage. I let my credit cards take care of the inconveniences.

Emergency Quarterback
When you call the Allianz 24/7 helpline during a medical emergency, a Benefit Administrator will be assigned to help with coordinating your care, and if needed, your evacuation. That takes a major stress factor off our shoulders.

A word of caution: The Benefit Administrator must verify your emergency with medical authorities. This person also has to be the one to coordinate all medical care and transportation, or you will not be reimbursed.

Get covered from day one

Another reason why the Allianz plan complements free coverage is that some cards only cover trips spanning 5-60 days. This is the case for both the Chase Sapphire Preferred® Card and the Chase Sapphire Reserve®.

So a short four-day stay and an extended 61-day or more excursion aren’t covered by the Chase Sapphire Reserve®. Your Allianz plan starts from the day of scheduled departure through the 90th day.

The information related to Chase Sapphire Preferred® Card has been collected by CardRatings and has not been reviewed or provided by the issuer of the card.

Save even more with an annual plan

If you travel at least twice a year, the best deal you can get with Allianz is with an annual plan. If you travel with family and friends, this is a no-brainer because there is a flat rate premium for between 2-8 people for the same set of benefits and coverage.

In March 2019, I paid $450 for my family of five, covering unlimited trips over 12 months. Each trip had to be under 90 days, which worked well for my family. That was the biggest bargain I ever got on solid travel insurance.

MedJet Assist

I have not personally used MedJet’s air ambulance and crisis mitigation services (thank goodness), but I’ve been a member. I signed up because Medjet has a policy that covers one aspect that a travel policy like Allianz does not: rescue from a destination when things go really, really badly.

This is a niche service that most of you will not need. But if you go to a country where the situation becomes unstable due to political unrest, natural disaster, or a pandemic, MedJet and its partner, Focus International, will coordinate a rescue for you and your family, regardless of whether or not a government-issued evacuation has been ordered.

Final Thoughts

No one really wants to go on a trip planning for the worst to happen. That’s no fun at all.

But during a crisis, we should be focusing on what’s truly important–getting ourselves and the people we care for the best care available, and then getting out of dodge ASAP.

The last thing we need is to also be worrying about the financial fallout of the emergency. Having the right combination of travel insurance will take care of both.

If you found this course on travel rewards helpful, you may also enjoy this free illustrated guide, packed with many other ways to get more for your buck and win back your financial independence.

Course content originally produced by ChooseFI was edited/updated by CardRatings for this lesson.