Insurance linked to credit cards

Many credit card users are unaware of the advantages and coverage they have for having contracted their cards. In fact, a report by the Association of Bank and Insurance Users indicated at the time that 90% of consumers are unaware of these insurance policies.

To get an idea of the insurance business, families pay an average of 1,015.34 euros a year for their policies and 82% of them do not know the number of insurance policies they have taken out.

Credit card insurance

Banks and savings banks “systematically” fail to comply with the obligation to inform customers about the different types of insurance taken out when taking out a card. It is therefore necessary to find out about them beforehand in order to be able to benefit from all the coverage inherent to our credit cards.

As a general rule, they are usually free insurances and without costs that are already included in the acquisition of the credit cards. These costs are included in the card commissions paid annually.

Coverage of insurance associated with credit cards

The contingencies included in the insurance will depend on each financial institution. The most frequent are usually those related to accidents, travel or theft or loss.

Among the most interesting coverages to be taken into account are the following:

  • Travel insurance: bonuses and reimbursements for flight delays or cancellations.
  • Life or death insurance: this insurance is in most credit cards for the cardholder and is generally intended to cover the balance of the card at the time of death, although it is also granted as family protection insurance.
  • Baggage damage or loss insurance: usually covers total loss and partial loss of baggage.
  • Theft or loss insurance: covers any charge made to our account up to 72 hours prior to the notification to be made to the bank. Remember to notify in a timely manner.
  • Fraud insurance: operates similarly to the theft or loss insurance. It covers cloning and cards not recognized by the customer, although it often only covers theft or loss.
  • Travel accident insurance: generally covers accidents and illnesses of the cardholder, spouse and their descendants. It also usually covers emergency medical expenses, emergency assistance or early transfer in case of certain problems in the country of origin.
  • Purchase protection insurance: covers against eventual inconveniences with the products purchased with the credit card. They generally have an established term and as long as the product is paid in full.

Beware of the small print of credit card insurance policies

The acquisition of a credit card always involves the signing of a contract between the cardholder and the bank. As with any type of product, it is necessary to read the clauses carefully and pay attention to the fine print. If you do not have the contract, you can request a copy from your bank and analyze the clauses you signed at the time.

Are credit card insurances substitutes for ordinary insurances?

This is a common question regarding credit card insurance, unfortunately the answer is not very positive for most users. While it is true that credit card insurance in some cases may offer additional coverage that may not be included in our usual level of insurance (for example, travel insurance, luggage insurance or similar), the truth is that the most common types of insurance associated with credit cards have more to do with the user’s own financial debts with the entity for the credit user than with other issues, so that they can indeed play an important role in assuming these costs on credit, but are not substitutes or relevant in other areas of the user’s insurance.

Obviously, the higher the level of credit card, the higher the level of associated insurance. This would mean that the most expensive credit cards, or those intended to be exclusive products, do have more complete and complex insurance associated with them, but, logically, these are also aimed at a user profile that is also exclusive, and far removed from the average habitual user of these products.

Knowing your credit card insurance

The quickest way to find out about the insurance associated with your credit card is to check them in the particular conditions of the contract, that is to say, to review the card contract. In any case, should any problem arise during this personal consultation, the financial institution issuing the card is obliged to provide us with information on the product in a clear and easy-to-understand manner, so a simple consultation at your branch should be able to resolve all doubts in this regard.