Benefits of credit card insurance can help travelers

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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.

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How to Get Reimbursed by Southwest Airlines

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.

How a credit card with travel insurance can help you

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.

Chase Sapphire Preferred® Card

  • Awards

    $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 spending $4,000 on purchases within the first 3 months of account opening. It’s $750 when you redeem through Chase Ultimate Rewards®.

  • Annual subscription

  • Introduction AVR

  • Regular APR

    20.24% – 27.24% variable on purchases and balance transfers

  • Balance Transfer Fee

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

  • Foreign transaction fees

  • Credit needed

Chase Sapphire Reserve®

  • Awards

    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 spent on travel purchases per year. Earn 3 X points on other trips and restaurants and 1 point per dollar spent on all other purchases, plus 10 X points on Lyft rides through March 2025

  • welcome bonus

    Earn 60,000 bonus points after spending $4,000 on purchases within the first 3 months of account opening. It’s $900 for the trip when you redeem through Chase Ultimate Rewards®

  • Annual subscription

  • Introduction AVR

  • Regular APR

  • Balance Transfer Fee

  • Foreign transaction fees

  • Credit needed

Bank of America® Premium Rewards® Credit Card

  • Awards

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

  • welcome bonus

    Receive 50,000 bonus points – a $500 value – after making at least $3,000 in purchases within the first 90 days of account opening.

  • Annual subscription

  • Introduction AVR

  • Regular APR

    20.24% – 27.24% 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 fees

  • Credit needed

The Bank of America® Premium Rewards® credit card information was independently collected by Select and was not reviewed or provided by the card issuer prior to publication.

How to Use Credit Card Travel Insurance

To use the travel protections available with your credit card, be sure to purchase your plane tickets with this card. Otherwise, coverage will not apply.

Next, check out your credit card benefits guide. This will contain all the information about the type and amounts of insurance you have, as well as the time you have to submit a claim.

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

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.

At the end of the line

The holiday travel season has been particularly messy this year, with the South West crisis still affecting countless passengers. If a canceled flight or delayed luggage has strained 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 be a good idea to research cards that offer this benefit for future trips.

“We’ve all learned that when it comes to an airline meltdown like this, there’s only so much we can control,” Rebell says. “While some travel credit cards with insurance can be expensive, peace of mind…can be invaluable.”

Information about Bank of America® Premium Rewards® was independently collected by Select and was not reviewed or provided by the issuer prior to publication.

Editorial note: Any opinions, analyses, criticisms or recommendations expressed in this article are those of Select’s editorial staff alone and have not been reviewed, endorsed or otherwise endorsed by any third party.

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