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Is it worth it to get a credit card just for the insurance benefits?

Credit cards get a lot of attention because of their rewards and sign-up bonuses, but there’s a treasure trove of value in the credit card insurance benefits also offered.

If you’re on the fence about whether or not to get a credit card, you might think that the rewards, interest rate, or fees are the most important things to consider. But whether or not you plan to use a credit card regularly, it’s the insurance benefits that might make it worth it in the end.

Credit card insurance benefits don’t get a lot of fanfare, but if you use them right, you get more value from them than you’d earn in rewards from using the card.

Types of credit card insurance coverage and benefits

Credit cards offer several types of insurance coverage, both for everyday purchases and one-off needs. Some are ubiquitous while others are rarer. Here are the main credit card insurance benefits you may come across:

Price protection coverage

This benefit essentially insures you against price decreases after you buy a product. If this happens within a specific period after your purchase—usually two or three months—you can submit a claim and get a refund for the price difference.

Purchase protection coverage

If an item you bought with your credit card gets damaged, lost, or stolen within two to three months after the purchase, you can tap this benefit.

Depending on the credit card, you could get reimbursed up to the full amount you paid for the item.

Return protection coverage

If you’ve ever had trouble returning an item you purchased, you may have had an opportunity to utilize a return protection benefit. Where retailers may deny your return for whatever reason, your credit card may offer a refund instead.

This benefit is usually valid for two to three months after you made the purchase.

Cell phone insurance coverage

If you pay your cell phone bill with your card, you’ll get up to $600 in protection if the phone is damaged or stolen.

Barclays has included this perk with the Uber Visa Card.

Rental car insurance coverage

If you’ve ever rented a car, you know how expensive the added collision damage waiver can be. In some situations, it can cost almost as much per day as the rental itself. With credit card rental car insurance, you can skip the collision damage waiver.

Lost luggage protection

Some travel credit cards offer this coverage in case you lose your luggage, or it gets delayed. Your credit card can reimburse you up to a certain amount for lost items. Or, if your bags get delayed, reimburse you for essentials that you have to purchase in the meantime.

Trip cancellation/interruption insurance coverage

If you ever have to cut a trip short or cancel it altogether because of an illness, injury or death, your travel credit card may help you recover some of the nonrefundable travel expenses you’ve incurred. Some cards even offer this insurance if the cancellation or interruption happens due to severe weather.

Note that if you don’t have a credit card that offers this coverage, you can purchase travel insurance separately.

Are the perks alone worth it?

In short, yes. You can get a lot of value out of these fringe benefits if you keep track of when you qualify. For example, I bought an iPhone SE in 2017 when my previous phone died a watery death.

A couple of months later, Apple dropped the price of the model by $50 when it launched the iPhone 8 models. I knew this would happen and kept my receipt so that I could submit a claim for price protection. I included a copy of the receipt, my credit card statement, and a copy of the advertisement with the lower price, and within a few weeks, I got a check for $50 in the mail.

Some things to consider

While these insurance benefits may sound like a treasure trove, it’s not always easy to take advantage of them. That’s because a lot of these benefits have exclusions and caveats.

For example, you have to keep a lot of records on a purchase for price, purchase, and return protection. And some items, like certain electronics purchases, may not qualify for the benefit at all.

Credit card issuers also have limits for how much they’ll pay out per claim and per year, and they may limit how many claims you can make. So, you can’t claim every little thing that happens.

Also, most credit cards offer what’s called secondary rental car insurance. This means that if you get in an accident, it’s your personal insurance policy that gets tapped first, which can increase your rates.

Credit card rental car insurance also doesn’t include liability or personal injury coverage, and it may not cover certain types of vehicles or rentals in certain countries.

How to get the most out of your credit card’s insurance benefits

If you want to get as much value out of your credit card as possible, it’s essential to maximize your credit card’s insurance benefits. Here are three things you can do to accomplish that goal.

Keep good records of every purchase you make

Receipts are mandatory for many of the insurance benefits we’ve listed, so don’t accidentally throw these away, especially on big-ticket items where you’d get the most value. Don’t worry about getting paper statements, though. You should be able to access your statements through your online account.

Know the limits and exclusions

These insurance benefits come with a lot of fine print, so it’s crucial that you know what does and doesn’t qualify, and how much you can get. You can usually find this information in your cardholder agreement that you received with your card. If you no longer have it, reach out to your credit card company and ask for a copy or if they have it online.

Get some help

There are apps that can help you keep track of these benefits and when you can make a claim. For example, Sift can help automate much of the process of keeping track of items and price changes. It will also let you know which benefits you’re eligible for with each purchase you make.


Credit cards get a lot of attention because of their rewards and sign-up bonuses, but there’s a treasure trove of value in the insurance benefits these cards offer.

While it does take some extra legwork to take advantage of your credit card’s insurance benefits, the time and effort spent are often worth it, and if you use the right tool, you might even be able to outsource much of the work.

Read more

  • Ever Think Of Paying Bills With Rewards Credit Cards? Here’s Why That’s A Good Idea (And Why Sometimes It Isn’t)
  • Things To Consider Before Applying For A Credit Card

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