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Survey: Credit card trip cancellation insurance

By Daniel Workman

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It happens. You can't plan everything. Sometimes something gets in the way of that vacation you've set your heart on. But forfeiting money spent on prepaid trip expenses isn't the only option. Some credit cards offer benefits that reimburse prepaid expenses for cancelled trips.

Only 20 of the 150 credit cards reviewed for this article (see chart below) include free trip cancellation insurance, while 14 of those 20 products impose an annual fee exceeding $100. HSBC Premier MasterCard and three Visa Desjardins cards (Classic, Elegance Gold and Modulo Gold) offer trip cancellation coverage without annual fees.

How trip cancellation insurance works
Trip cancellation insurance enables cardholders to recover non-refundable expenses charged to their cards when unforeseeable events force them to cancel prepaid travel outside their province of residence. Some credit cards like the HSBC Premier MasterCard cover full-fare tickets only, while other cards like the Capital One Aspire Travel World MasterCard reimburse myriad non-refundable trip costs including hotel stays and car rentals.trip-insurance

In all cases, cardholders must cancel their trip before the scheduled departure date.

Eligible causes for a trip cancellation are specified in the cardholder agreement and typically include medical emergencies suffered by cardholders, close relatives or travel companions. A doctor's written certification is required. Examples of acceptable non-medical reasons are government-issued travel warnings, employer-initiated job transfers and jury duty.

Tip: You must cancel your trip and notify the insurer within 48 hours of the event that caused the cancellation.

Widely varying maximums
For cardholders who take many family trips, National Bank Platinum MasterCard has the most generous dollar limit. The card reimburses the cardholder for up to $2,500 in non-refundable expenses, and also allows up to that same maximum for each immediate family member.

Although ScotiaGold Passport Visa card also features a $2,500 cardholder maximum, the overall cap for all travel companions booked for the same cancelled trip is $10,000. BMO World Elite MasterCard imposes a cardholder account maximum of $5,000 per excursion.

In contrast, trip cancellation benefits under the Visa Desjardins Classic, Elegance Gold and Modulo Gold cards are subject to a tiny $500 maximum. And, eligible trips must not exceed 3 days.

Tip: Before choosing which credit card to use, consider how much your non-refundable liability could be.

Watch out for the pre-existing conditions limitation
Among the 20 cards with free trip cancellation coverage, four plans deny eligibility based on age. Trip cancellation insurance under the ScotiaGold Passport Visa card excludes applicants age 65 and older, while 75 is the age cut-off for the free three-day coverage under the three Visa Desjardins products.

The most restrictive exclusion is the pre-existing conditions limitation. This clause can nullify an otherwise reimbursable trip cancellation claim if the applicant consulted a doctor, was hospitalized or received medication or treatment before the scheduled departure date.

For example, the TD First Class Travel Visa Infinite card disallows pre-existing conditions when there are visible symptoms within 180 days from when a cardholder charges trip costs to their credit card (365 days for persons age 75 or over).

Tip: Cardholder agreement language can be tricky, so check with the card issuer's client services area if you're unsure about how the pre-existing condition limitation applies to you.

Complementary travel benefits
Because trip cancellation insurance protects against risks that happen before the scheduled departure date, it is best supplemented with trip interruption coverage and flight delay insurance.

Among the 20 credit cards that come with trip cancellation insurance, 15 cards also provide free trip interruption coverage. Those cardholders qualify for reimbursement when they are unable to continue a trip already started due to accidental injury, sickness, severe weather conditions, government travel restrictions and similar serious events.

Only 9 of the 20 cards include the flight delay benefit, which reimburses reasonable costs incurred due to a missed connection or departure delayed by at least four hours.

Tip: Keep all supporting documentation in good order for claim submission, including your original tickets.

So which card is best for you? To find out, compare the cards below.

FIND THE BEST TRAVEL INSURANCE CREDIT CARD FOR YOU
Credit card
APR/Annual fee

Trip cancellation coverage limits

Trip interruption coverage limits Flight delay coverage limits
HSBC Premier MasterCard 12.9%/
$0
$1,500 for primary cardholder, $1,500 per additional insured person*
$1,500 for primary cardholder, $1,500 per insured person
N/A
Visa Desjardins Classic  19.4%/
$0
$500 maximum coverage for primary cardholder and all insured persons  N/A  N/A
Visa Desjardins Elegance Gold  (3 day travel only)  19.9%/
$0
$500 maximum coverage for primary cardholder and all insured persons        N/A  N/A

Visa Desjardins Modulo Gold   (3 day travel only)

 9.9%/
$50
$500 maximum coverage for primary cardholder and all insured persons      
 N/A  N/A
RBC U.S. Dollar Visa Gold
19.99%/
$65
$2,500 for primary cardholder, $2,500 for each additional cardholder**       
$2,500 maximum coverage for each cardholder OR $2,500 maximum per trip for cardholder's spouse and dependent children  N/A

CAA Premium MasterCard

 19.5%/
$99
$1,000 for primary cardholder, $5,000 per trip                    
$5,000 for primary cardholder, $25,000 per trip If the delay is at least 4 hours (and requires you to make other arrangments), you can be reimbursed for eligible living expenses, up to $500 per day and $1,000 per trip.
Visa Desjardins Odyssey Gold
 19.4%/ $110
$2,000 for primary cardholder, $2,000 per insured person           
Unlimited coverage in case of trip interruption after departure  N/A
Aspire Cash World MasterCard  19.8%/ $110 $1,000 for primary cardholder, $5,000 per trip
$5,000 for primary cardholder, $25,000 per trip  N/A
ScotiaGold Passport Visa Card
 19.99%/ $110 $2,500  for primary cardholder,  $10,000 per trip
$2,500 for primary cardholder, $10,000 per trip  N/A
RBC Rewards Visa Preferred
 19.99%/ $110 $2,500  for primary cardholder,  $2,500 for each additional cardholder                          
$2,500 for primary cardholder, $2,500 for each additional cardholder                     
$2,500 for primary cardholder, $2,500 for each additional cardholder
Delta SkyMiles World MasterCard
 19.8%/ $120 $1,000 for primary cardholder, $5,000 per trip
$5,000 for primary cardholder, $25,000 per trip
$250 per day, up to $1,000 per trip, for delays of at least 4 hours
Priority Club World MasterCard
 19.8%/ $120 $1,000 for primary cardholder, $5,000 per trip $5,000 for primary cardholder, $25,000 per trip
$250 per day, up to $1,000 per trip, for delays of at least 4 hours
Aspire Travel World MasterCard
 19.8%/ $120 $1,000 for primary cardholder, $5,000 per trip
$5,000 for primary cardholder, $25,000 per trip $250 per day, up to $1,000 per trip, for delays of at least 4 hours
TD First Class Travel Visa Infinite Card
 19.99%/ $120
$1,000 for primary cardholder, $5,000 per trip
$5,000 for primary cardholder, $25,000 per trip
N/A
CIBC Aventura World MasterCard

 19.5%/ $125

$1,000 for primary cardholder, $5,000 per trip
$2,000 for primary cardholder, plus $2,000 per insured person Maximum of $500, if the delay is at least 4 hours
National Bank Platinum MasterCard
 19.5%/ $125 $2,500  for primary cardholder, $2,500 per insured person
$5,000 for primary cardholder, $5,000 per insured person Up to $500 per insured person, if the delay is at least 4 hours
BMO World Elite MasterCard
 20.5%/ $150 $2,000 for primary cardholder, $5,000 per account
$2,000 for primary cardholder, plus $2,000 per insured person Up to $500 per account for delays of at least 6 hours
Visa Desjardins Platinum
 9.9%/
$169
$2,000 for primary cardholder, plus $2,000 per insured person Unlimited coverage in case of trip interruption after departure  N/A
AMEX Platinum Card
 30%/
$399
$1,500 per insured person, up to a maximum of $3,000 $1,500 per insured person, up to a maximum of $6,000
Up to $1,000 per trip for items purchased within 48 hours, if the delay is at least 4 hours
AMEX AeroplanPlus Platinum Card  30%/
$499
$1,500 per insured person, up to a maximum of $3,000 $1,500 per insured person,up to a maximum of $6,000 Up to $1,000 per trip for items purchased within 48 hours, if the delay is at least 4 hours

Source: CreditCards.ca survey of leading travel rewards card issuers. All terms and conditions are subject to change by issuer. Data in the chart are current as of March 16, 2012.

*"Insured person" is defined as the primary cardholder, spouse and children.

**RBC cards enable the primary cardholder to include secondary cardholders under the same account; spouses and children will not be covered for trip cancellation coverage unless they sign up as secondary cardholders.

See related: Big cash savings from little-known credit card freebies; Editor's Choice: The best air travel rewards


Published: March 16, 2012