Credit Card Insurance Benefits May Help Travelers

Travelers wait to check-in at the Southwest Airlines check-in counter at Oakland International Airport (OAK) in Oakland, California, on Tuesday, Dec. 27, 2022.
If you’re stranded in the middle of the Southwest Airlines crisis, your wallet may be feeling the impact of your upended travel plans. Luckily, it may also contain a possible solution. For more than a week, Southwest has suffered through a historic meltdown that’s wrecked both its reputation and the travel plans of passengers. Mass cancellations and delays have sent hundreds of thousands of people scrambling to rebook flights and accommodations. To add insult to injury, many have also been separated from their luggage. The airline might reimburse passengers some of the costs they’ve incurred as a result of disrupted travel plans. But if you’ve booked your Southwest flight with a credit card that offers travel insurance, you may have better chances of getting your money back. Here’s what Southwest may agree to cover — and how your credit card might help if the airline falls short of your expectations.
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How to get reimbursed by Southwest Airlines
Before you reach out to your credit card issuer for help, make sure you get in touch with Southwest first. Federal law requires the airline to offer you a refund on a flight that they’ve canceled, so you should be able to get your money back for your ticket. “Southwest is refunding canceled flights, but travelers may have been hit with other costs,” says Bobbi Rebell, CFP and author of “Launching Financial Grownups.” The airline says it “will honor reasonable requests for reimbursement for meals, hotel, and alternate transportation.” But there’s no definition of what’s considered “reasonable” or any timeframe for when travelers may expect to hear back about their requests. “In other words, there are no guarantees,” says Rebell. Any Southwest passenger affected by a flight cancellation or significant delay between Dec. 24, 2022, and Jan. 2, 2023 can submit receipts for additional expenses via email on the airline’s website. If you don’t have any luck with Southwest, check which credit card you’ve used to pay for the flight and extra expenses. Depending on the travel protection benefits it offers, you could still get back some money.
How a credit card with travel insurance can help
Travel insurance can keep you covered when your travel plans go awry for reasons beyond your control and you incur additional expenses as a result. Some premium travel credit cards offer this type of coverage as a benefit. A credit card can come with several types of travel protections, but the following three can be especially helpful in the Southwest crisis (or a similar one): Trip delay insurance , which can reimburse you for meals and lodging when your trip is delayed.
, which can reimburse you for meals and lodging when your trip is delayed. Trip cancellation and interruption insurance , which can cover eligible travel expenses if your trip is canceled or cut short.
, which can cover eligible travel expenses if your trip is canceled or cut short. Baggage insurance, which can cover damage or loss of your luggage or select items, such as toiletries or clothes, or if your luggage delayed. The cards that offer all three of these travel protections include the Chase Sapphire Preferred® Card, the Chase Sapphire Reserve® and the Bank of America® Premium Rewards® credit card. So, if Southwest fails to reimburse you for lost luggage or for lodging expenses while you’re stranded, one of these cards can help.
Chase Sapphire Preferred® Card Learn More On Chase’s secure site Rewards $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 purchases, and 1X points on all other purchases
Welcome bonus Earn 60,000 bonus points after you spend $4,000 on purchases in the first 3 months from account opening. That’s $750 when you redeem through Chase Ultimate Rewards®.
Annual fee $95
Intro APR None
Regular APR 19.74% – 26.74% variable on purchases and balance transfers
Balance transfer fee Either $5 or 5% of the amount of each transfer, whichever is greater
Foreign transaction fee None
Credit needed Excellent/Good Terms apply.
Chase Sapphire Reserve® Learn More On Chase’s secure site Rewards Earn 5X total points on flights and 10X total points on hotels and car rentals when you purchase travel through Chase Ultimate Rewards® immediately after the first $300 is spent on travel purchases annually. Earn 3X points on other travel and dining & 1 point per $1 spent on all other purchases plus, 10X points on Lyft rides through March 2025
Welcome bonus Earn 60,000 bonus points after you spend $4,000 on purchases in the first 3 months from account opening. That’s $900 toward travel when you redeem through Chase Ultimate Rewards®
Annual fee $550
Intro APR None
Regular APR 20.74% – 27.74% variable
Balance transfer fee 5%, minimum $5
Foreign transaction fee None
Credit needed Excellent Terms apply.
Bank of America® Premium Rewards® credit card Rewards Earn unlimited 2 points for every $1 spent on travel and dining purchases and unlimited 1.5 points per $1 spent on all other purchases.
Welcome bonus Receive 50,000 bonus points — a $500 value — after you make at least $3,000 in purchases in the first 90 days of account opening.
Annual fee $95
Intro APR N/A
Regular APR 18.99% – 25.99% variable APR on purchases and balance transfers
Balance transfer fee Either $10 or 3% of the amount of each transaction, whichever is greater
Foreign transaction fee None
Credit needed Excellent/Good Terms apply. Information about the Bank of America® Premium Rewards® credit card has been collected independently by Select and has not been reviewed or provided by the issuer of the card prior to publication.
How to use credit card travel insurance
To use travel protections available with your credit card, make sure you purchase your airplane tickets with that card. Otherwise, the coverage won’t apply. Next, check your credit card’s benefits guide. This will have all the information on the type and amounts of insurance available to you, as well as how long you have to submit a claim. “There are big differences in coverage depending on which card you have, so it’s essential to read the fine print ahead of time and understand what is and is not covered,” Rebell says. For example, in the case of trip cancellation or interruption, the Chase Sapphire Preferred or Reserve cards can reimburse you for up to $10,000 per person and $20,000 per trip for eligible pre-paid, non-refundable travel expenses, including transportation, tours and lodging. The 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 about your specific situation to ensure that coverage will apply. Once you know what coverage you’re entitled to, get your documentation in order. Gather up all the receipts for purchases you want to receive reimbursement for. You also should have records showing any loss that has occurred and communication with the travel provider proving it has failed to reimburse you. With your documents ready, you can file a claim. This usually involves getting in touch with your issuer’s benefits administrator and filling out a claim form you can submit with all the evidence you’ve gathered. Sometimes, you can also begin the process online. Check your benefits guide for specific instructions and contact information. After you submit the claim, all that’s left to do is to wait for the issuer’s decision. If all goes well and the bank approves your claim, they’ll be in touch to explain how you’ll receive the funds.
Bottom line
The holiday travel season has been especially messy this year, with the Southwest crisis still affecting countless passengers. If a canceled flight or delayed luggage has put a strain on your budget, and you’re worried the airline won’t help, your travel credit card might offer a solution. If your credit card doesn’t offer travel insurance but you travel often, it might make sense to look into cards with this benefit for your future trips. “We’ve all learned that when it comes to an airline meltdown such as this one, there’s only so much we can control,” Rebell says. “While some travel credit cards with insurance can be pricey, the peace of mind… can be priceless.”
Editorial Note: Opinions, analyses, reviews or recommendations expressed in this article are those of the Select editorial staff’s alone, and have not been reviewed, approved or otherwise endorsed by any third party.