Credit cards: What types of credit card insurance are available, are they worth it?

Just like other insurance coverage, credit cards also offer insurance to the card users. A credit card insurance covers a range of eventualities such as travel delay, trip cancellation, credit card shield and fraud protection. It is vital to note that a credit card user does not need to pay anything extra to avail this cover. By virtue of being a cardholder, one automatically gets covered by this insurance.

The insurance offered by the credit card makes sure that the user gets the amount equivalent to the coverage in case one of the eventualities takes place. 

Here, we list out all the credit card insurance offered by different card issuers.

In other words, credit card insurance offers various types of protections, often included as benefits for cardholders. These can provide significant value depending on your lifestyle and spending habits.

Common credit card insurance are as follows:

1. Travel insurance

A. Trip Cancellation/Interruption: This coverage reimburses prepaid, non-refundable expenses if your trip is cancelled or interrupted due to covered reasons (e.g., illness, severe weather).

B. Travel Delay: It covers expenses (such as lodging, meals & transportation) if your travel is delayed for a given number of hours.

C. Lost or damaged luggage: This insurance cover reimburses the user for baggage lost, stolen, or damaged during travel.

D. Emergency cover: This insurance coverage entails medical expenses or evacuation costs if you get injured or fall unwell overseas.

2. Purchase protection

It protects new items against theft or accidental damage within a specified period (such as 90 to 120 days).

3. Extended warranty

It extends the manufacturer's warranty on eligible items, typically by one or two years.

4. Return protection

It allows you to return eligible items within a certain period, even if the retailer is unwilling to accept them.

5. Mobile Insurance

This is quite similar to the purchase protection which covers damage, theft, or loss of your mobile phone when the purchase was done using the card.

6. Fraud protection

It limits your liability to zero in case of any unauthorised charges or fraud. However, the card issuer could impose some conditions to let this coverage kick in.

7. Credit shield Insurance

In case of the cardholder's demise, it could be challenging to repay the existing debt. Credit Insurance can pay off such debts resulting only from the use of credit cards as per the pre-fixed limit.

8. Accident cover

Some credit cards offer an additional accident insurance cover of say ₹5 or ₹10 lakh to the cardholder.