Many times the credit cards we use everyday provide a limited amount of insurance and warranty that we don’t even think about because it’s not publicized in the media (some people don’t even know the fee structure of their credit cards, something that affects them more directly). While it’s useful to know this information, the cash back percentage will probably dictate which card you intend to use for a purchase – though these warranties could be the tiebreaker amongst a sea of 1% cash backs. Below I’ll detail some of the common coverage’s though you’ll need to read specifics under your Terms and Conditions for your car.
In the case of insurance, it’s secondary coverage so you’ll need to file a claim with your first insurer or, say in the case of lost luggage, with the provider. Then the credit card company may pay the difference between your loss and what the primary insurance covered. As for warranties, they’re usually a sort of extended warranty that kicks in after the manufacturer’s warranty expires. With many of these, you are at the mercy of your credit card company and some are better at accepting claims and paying out than others.
Common Carrier Travel Accident Insurance
If you pay the entire common carrier fare on any “land, water, or air conveyance” then you get supplemental deductible travel accident insurance.
Lost Luggage Insurance
As experience has taught many, airlines sometimes lose luggage and when you do file a claim with the airline they will try to exclude whatever they can. A problem many run into is that the liability ceiling for many airlines is around $2,500 and if you (not me) have a few nice suits (or some electronics) – that cap goes out the window; that’s when the credit card insurance will come in and cover the difference.
Supplemental Auto Rental Collision Coverage
If you pay the entire auto rental fee, you receive collision coverage at no additional cost. That means the extra collision insurance that they offer is worth nothing to you. If you have automobile insurance anyway, you won’t need any of the insurance provided by the rental company anyway. But, on some cards you can pay extra for the coverage directly from the credit card – the benefit of that is if you do need to file a claim, your auto insurance premium won’t increase since they will never know. Apparently Diner’s Club cardholders receive primary auto rental insurance by default.
Product Warranties and Protections:
Product Theft Protection
On some cards, if the product is stolen within a specified period of time, they’ll replace it or reimburse you. Usually a police report or a notarized statement is required and there is typically a yearly ceiling and an incidence cap.
Product Damage Protection
On some cards, if the product is damaged by unforeseen events within a specified period of time, they’ll replace it or reimburse you. The language they use is for what qualifies is: “in the event of theft or damage due to fire, vandalism, accidentally discharged water, or weather. “
A lot of cards offer an extended warranty that equals the manufacturer’s warranty and come into effect after the manufacturer’s warranty. Sometimes they bump up the extended warranty to a year, even if the original is for less. For example, if Canon offers a manufacturer’s warranty of six months, your credit card could offer an additional year of protection after the original for a total of a year and a half worth of warranty. If the camera fails within six months, you file a claim with Canon. If it fails after that, you file the claim with the credit card directly.
So in summary… next time something you bought kicks the bucket before its time, see if your credit card will protect you even if the manufacturer’s warranty has expired. Since it’s not like real insurance and your premium won’t go up, you have nothing to lose even if it’s a $20 junky remote. Experience has shown that credit card companies that charge annual fees (Amex, Diner’s Club, etc) usually are better at this because they place a premium on customer service because they charge that fee, even if the card you are using doesn’t have a fee. Good luck and please write any experiences you have had, positive or negative, regarding these insurances and warranties.