Benefits of credit card insurance can help travelers

If you’re stuck in the middle of the Southwest Airlines crisis, your wallet may feel the impact of your disrupted travel plans. Fortunately, it may also contain a possible solution.

For more than a week, Southwest has suffered a historic collapse which destroyed both its reputation and the travel plans of the passengers. Massive cancellations and delays have caused hundreds of thousands of people to rush to book flights and accommodation. To add insult to injury, many were also separated from their luggage.

The airline could reimburse passengers for some of the costs they incurred due to disrupted travel plans. But if you booked your flight to the southwest with a credit card that offers travel insurance, you may have a better chance of getting your money back. Here’s what Southwest can agree to cover — and how your credit card can help if the airline doesn’t meet your expectations.

Before contacting your credit card issuer for help, make sure you get in touch with the southwest first. Federal law requires the airline to offer you a refund on a flight they canceled, so you should be able to get your money back for your ticket.

“Southwest is providing refunds for canceled flights, but travelers may have been impacted by other costs,” says Bobbi Rebell, CFP and author of “Launching Financial Grownups.” The airline said it “will honor reasonable requests for reimbursement for meals, hotel and other transportation.” But there’s no definition of what’s considered “reasonable” or a time frame that travelers can expect to hear back from their requests.

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

Any Southwest passenger affected by a flight cancellation or long delay between December 24, 2022 and January 2, 2023 can submit receipts for additional expenses via email on the airline website.

If you’re unlucky with Southwest, check which credit card you used to pay for the flight and extra expenses. Depending on the travel protection benefits it offers, you could still get some money back.

Travel insurance can protect you when your travel plans go wrong for reasons beyond your control and you incur additional expenses as a result. Certain premiums travel credit cards offer this type of coverage as a benefit.

A credit card can come with several types of travel protectionbut the following three can be particularly useful in the Southwest crisis (or a similar crisis):

• Trip delay insurancewho can reimburse you for meals and accommodation when your trip is delayed.
• Trip cancellation and interruption insurancewhich may cover eligible travel expenses if your trip is canceled or curtailed.
• Baggage insurancewhich may cover damage to or loss of your baggage or certain items, such as toiletries or clothing, or if your baggage is delayed.

Cards that offer these three travel protections include the Chase Sapphire Preferred® Cardthem Chase Sapphire Reserve® and the Bank of America® Premium Rewards® credit card. So if Southwest won’t reimburse you for lost luggage or accommodation costs while you’re stranded, one of these cards can help.

For example, in the event of trip cancellation or interruption, the Favorite Chase Sapphire or Reserve Cards can reimburse you up to $10,000 per person and $20,000 per trip for eligible prepaid, non-refundable travel expenses, including transportation, tours and accommodation. Bank of America’s 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 discuss your specific situation to ensure coverage will apply.

Once you know what coverage you are entitled to, get your paperwork in order. Gather all receipts for purchases you want to be reimbursed for. You should also have records showing any losses that occurred and communication with the travel supplier proving that they did not reimburse you.

With your documents ready, you can file a claim. This usually involves contacting your issuer’s benefits administrator and completing an application form that you can submit along with any evidence you have gathered. Sometimes you can also start the process online. See your benefits guide for specific instructions and contact information.

After submitting the complaint, all that remains is to wait for the issuer’s decision. If all goes well and the bank approves your request, they will contact you to explain how you will receive the funds.