Credit Card Insurance Benefits Can Help Travelers

If you’re caught in the middle of the Southwest Airlines crisis, your wallet may be feeling the impact of your altered travel plans. Fortunately, it may also contain a possible solution.

For more than a week, Southwest has been reeling from a historic meltdown that has hit both its reputation and passengers’ travel plans. Mass cancellations and delays have left hundreds of thousands scrambling to rebook flights and accommodation. To add insult to injury, many have also parted with their luggage.

The airline may reimburse passengers for a portion of the costs incurred as a result of the disruption to their travel plans. But if you booked your Southwest flight with a credit card that offers travel insurance, you may have a better chance of getting your money back. What Southwest might agree to cover — and how your credit card can help if the airline doesn’t live up to your expectations.

Before contacting your credit card issuer for assistance, be sure to contact Southwest first. Federal law requires an airline to offer you a refund for a canceled flight, so you should be able to get a refund for your ticket.

“Southwest refunds canceled flights, but travelers may have incurred other costs,” said Bobby Rebell, CFP and author of “Getting Started with Financial Growers.” The airline said it would “comply with reasonable requests for reimbursement of food, hotel and alternative transportation costs.” But there’s no definition of what’s considered “acceptable” or a time frame travelers can expect to hear back about their enquiries.

“In other words, there are no guarantees,” says Rebell.

Any Southwest passenger affected by a flight cancellation or significant delay between December 24, 2022 and January 2, 2023 can submit a receipt for additional costs via email on the airline’s website.

If you have no luck with Southwest, check which credit card you used to pay for the flight and incidentals. Depending on the travel protection benefits it offers, you may still get some cash back.

Travel insurance can cover you if your travel plans are disrupted for reasons beyond your control and you incur additional costs as a result. Some premium travel credit cards offer this type of coverage as a perk.

A credit card can come with several types of travel protection, but the following three can be especially helpful in a Southwest crisis (or similar):

• Travel delay insurancethis can pay you for food and accommodation if your trip is delayed.
• Trip cancellation and interruption insurancemay cover eligible travel expenses if your trip is canceled or shortened.
• Baggage insurancethis may include damage to or loss of your luggage or selected items such as toiletries or clothing or the delay of your luggage.

Cards that offer these three travel protections include the Chase Sapphire Preferred® Card, Chase Sapphire Reserve® and Bank of America® Premium Rewards® credit cards. So if Southwest can’t pay you for lost luggage or a stranded stay, one of these cards can help.

To take advantage of the travel protections available with your credit card, be sure to purchase your airline tickets with that card. Otherwise, coverage will not apply.

Next, check your credit card benefits brochure. It will contain all the information about the type and amounts of insurance, as well as how long you have to file a claim.

“There are big differences in coverage depending on which card you have, so it’s important to read the fine print beforehand and understand what is and isn’t covered,” says Rebell.

For example, in the event of a trip cancellation or interruption, the Chase Sapphire Preferred or Reserve cards can reimburse you up to $10,000 per person and $20,000 per trip for prepaid, non-refundable travel expenses, including transportation, tours and lodging. . And Bank of America Premium Rewards can only pay up to $2,500 for non-refundable passenger fares.

You can also call your credit card issuer and discuss your specific situation to make sure coverage applies.

Once you know what coverage you have, get your paperwork in order. Collect all receipts for the purchases you want to be reimbursed for. You must also provide records of any losses incurred and evidence that your contact with the travel provider was unable to compensate you.

Once your documents are ready, you can file a claim. This usually involves contacting your issuer’s benefits administrator and filling out a claim form that you can submit with all the evidence you’ve gathered. Sometimes you can start the process online. Check the benefits guide for specific instructions and contact information.

After you submit the claim, you have to wait for the issuer’s decision. If everything is in order and the bank approves your claim, they will be in touch to explain how you will receive the money.

The holiday travel season has been particularly turbulent this year, with the Southwest crisis still affecting countless passengers. If a canceled flight or delayed baggage has hit your budget hard and you’re worried the airline won’t help, your travel credit card may offer a solution.

If your credit card doesn’t offer travel insurance, but you’re a frequent traveler, it might make sense to look at cards with this benefit for future trips.

“We’ve all learned that when it comes to an airline failure like this, there’s only so much we can control,” Rebell said. “While some travel credit cards with insurance can be expensive, the convenience…can be priceless.”