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Credit Card Insurance Benefits May Help Travelers

If you’re stuck in the middle of the Southwest Airlines crisis, your wallet may be feeling the upside-down repercussions of your travel plans. There is a possibility that

For more than a week, Southwest Airlines suffered a historic meltdown that ruined both its reputation and passengers’ travel plans. Hundreds of thousands of people are rushing to rebook flights and accommodations due to mass cancellations and delays. To add insult to injury, many are cut off from their luggage.

Airlines may reimburse passengers for a portion of the costs incurred by them as a result of disruptions to their travel plans. However, if you booked your Southwest Airlines flight with a credit card that offers travel insurance, you are more likely to get a refund. Here’s what Southwest might agree to cover, and how credit cards can help if the airline falls short of expectations.

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How to get a refund from Southwest Airlines

Always contact Southwest before contacting your credit card issuer. Federal law requires airlines to provide refunds for flights that they cancel, so you should be able to get your money back for your ticket.

“Southwest is reimbursing canceled flights, but travelers may be hit with other costs,” said Bobby Level, CFP and author of “Launching Financial Grownups.” increase. The airline says it will “respect reasonable requests for reimbursement of meals, hotels and alternative transportation.” However, there is no definition of what is considered “reasonable” or when travelers can expect a response to their requests.

“That means there are no guarantees,” says Rebell.

Southwest Airlines passengers affected by flight cancellations or significant delays between December 24, 2022 and January 2, 2023 should submit receipts for additional costs via email via the airline’s website. I can do it.

If Southwest doesn’t work out, check the credit card you used to pay for your flight and extras. Depending on the travel protection benefits it offers, you could still make some money back.

How a credit card with travel insurance can help

Travel insurance will cover you if your travel plans go awry for reasons beyond your control, resulting in additional costs. Some premium travel credit cards offer this type of coverage as a benefit.

Credit cards come with several types of travel protection, but the following three are particularly useful in the Southwest crisis (or similar).

  • travel delay insurancecan be reimbursed for meals and lodging in the event of travel delays.
  • Trip cancellation/interruption insurancecan cover your eligible travel expenses if your trip is canceled or shortened.
  • Baggage insurancedamaged or lost luggage or some items such as toiletries and clothes, or delayed luggage.

Cards that offer all three of these travel protections include the Chase Sapphire Preferred® Card, Chase Sapphire Reserve® and Bank of America® Premium Rewards® credit cards. So, if Southwest fails to refund your lodging costs while you’re lost or stranded, one of these cards can come in handy.

Chase Sapphire Preferred® Card

  • reward

    $50 annual Ultimate Rewards hotel credit, 5x points on travel purchased through Chase Ultimate Rewards®, 3x points on dining, 2x points on all other travel, 1x points on all other purchases

  • welcome bonus

    Earn 60,000 bonus points when you spend $4,000 within the first three months of opening your account. $750 when redeemed through Chase Ultimate Rewards®.

  • Annual fee

  • Introduction APR

  • Normal APR

    19.74% – 26.74% change in purchases and balance transfers

  • Balance transfer fee

    $5 or 5% of each transfer amount, whichever is greater

  • foreign transaction fee

  • need credit

Chase Sapphire Reserve®

  • reward

    When you purchase travel through Chase Ultimate Rewards®, you’ll earn 5x total points on flights and 10x total points on hotels and car rentals. Earn 3x points on all other travel and dining, 1 point per dollar spent on all other purchases and 10x points on Lyft rides through March 2025

  • welcome bonus

    Earn 60,000 bonus points when you spend $4,000 within the first three months of opening your account. $900 worth of travel when redeemed through Chase Ultimate Rewards®

  • Annual fee

  • Introduction APR

  • Normal APR

  • Balance transfer fee

  • foreign transaction fee

  • need credit

Bank of America® Premium Rewards® Credit Card

  • reward

    Earn unlimited 2 points per dollar spent on travel and dining purchases and unlimited 1.5 points per dollar spent on all other purchases.

  • welcome bonus

    Earn 50,000 Bonus Points (worth $500) when you make a purchase of $3,000 or more in the first 90 days of opening your account.

  • Annual fee

  • Introduction APR

  • Normal APR

    18.99% – 25.99% floating APR purchase and balance transfer

  • Balance transfer fee

    $10 or 3% of each transaction amount, whichever is greater

  • foreign transaction fee

  • need credit

Information regarding Bank of America® Premium Rewards® credit cards is collected independently by Select and is not verified or provided by the card issuer prior to issuance.

How to use credit card travel insurance

To take advantage of the travel protection available with your credit card, you must purchase your ticket with that card. Otherwise no compensation will apply.

Next, check out our credit card benefits guide. This will give you all the information about the types and amounts of insurance available and how long you need to submit your claim.

“Coverage varies greatly depending on which card you have, so it’s essential to read the fine print beforehand and understand what’s covered and what’s not covered,” says Rebell.

For example, in the event of travel cancellation or interruption, a Chase Sapphire Preferred or Reserve Card may be used against eligible prepaid, non-refundable travel expenses, including transportation, tours and lodging, up to $10,000 per person, 1 We will refund $20,000 per trip. Bank of America Premium Rewards, on the other hand, can only cover up to $2,500 for non-refundable passenger fares.

You can also call your credit card issuer and talk to them about your specific situation to make sure the warranty applies.

Once you know the scope of coverage you can receive, organize your documents. Collect all receipts for the purchases you want to refund. You will also need records showing the losses incurred and contact with your travel provider proving that they did not reimburse you.

Once your documents are ready, you can submit your claim. This usually requires contacting the issuer’s benefits administrator and completing a claim form where you can submit all the evidence you have collected. In some cases, you can even start the process online. Please refer to the benefits guide for specific instructions and contact information.

After submitting your claim, all you have to do is wait for the issuer’s decision. If all goes well and your bank approves the charge, your bank will contact you with instructions on how to receive your funds.

Conclusion

This holiday travel season has been particularly turbulent, with the crisis in the Southwest still affecting millions of passengers. If you’re worried about it, a travel credit card might be the solution.

If your credit card doesn’t offer travel insurance, but you travel frequently, it makes sense to consider a card with this benefit for future travel.

“We all know we have limited control when it comes to airline meltdowns like this,” Rebel said. “Some travel credit cards with insurance can be expensive, but the peace of mind… is priceless.”

Editor’s Note: The opinions, analyses, reviews or recommendations expressed in this article are those of Select’s editorial staff only and have not been reviewed, approved or otherwise endorsed by any third party.