What Is Credit Card Purchase Protection Insurance?
Sara Skodak
Author8 min read
When you invest your money into something, you want it to last. Unfortunately, our purchases are always susceptible to damage, loss, or theft. With this in mind, it’s helpful to have some type of protection over the things we pay for.
Credit card purchase protection insurance is the coverage that keeps your purchases safe – offering reimbursements, replacements, or repairs when insured items are wrecked, lost, or stolen. To help you navigate this credit card perk, we’ve gathered all the information on how it works, what it offers, and the best credit cards that include it in their packages.
How Credit Card Purchase Protection Insurance Works
Imagine you just bought a new laptop, it’s only been a couple of weeks, and you come home from a quick coffee meet-up only to find that it’s been stolen from your unlocked apartment. There are a couple of lessons to be learned here. First, always remember to lock your door, no matter how long you’ll be gone. Second, you can make a purchase protection insurance claim for this incident on certain participating credit cards.
In events like these, use the following steps to best protect your purchases:
Confirm You Meet The Credentials
Unfortunately, you won’t automatically have purchase protection insurance simply by owning a credit card. The most important thing to check is that your credit card comes equipped with this type of coverage, which you should be able to conclude by reading your card’s insurance certificate.
You’ll also want to make sure you paid for your purchase using the covered card. This is the only way you’ll be able to use this card’s insurance.
Every credit card will have different conditions regarding coverage. To make sure your purchase is protected by your card’s insurance policy, you’ll want to double-check that insurance certificate again to see what’s specifically covered by your card, as well as how much and what types of coverage you can expect.
Keep in mind that your purchase will also need to be fairly recent, most cards provide coverage within 90-180 days of your purchase date.
File a Purchase Protection Insurance Claim As Soon As Possible
After you’ve confirmed that your card comes with purchase protection insurance, you’ll want to file your claim immediately. Many insurers place timelines on when you can successfully file a claim. To find out exactly how much time you have, refer to that same insurance certificate we mentioned in the previous section.
In the case of theft (like the scenario we provided above), you’ll also want to make sure you’ve filed a police report before making your claim.
We’ll go over how to make a proper claim later on in this post.
Wait Patiently For Approval
Once your claim is approved, you’ll receive notice regarding whether you’ll be receiving a refund, replacement or repair service (this will all depend on what the situation is and what types of coverage your card offers). The amount of time your potential approval will take will also depend on your case and card.
For damaged items, insurance will usually pay up to the repair cost of the item. If the item cannot be repaired, you can expect a reimbursement. Most cards have a limit regarding reimbursement, which is typically $1,000 for most cards.
What’s Covered by Credit Card Purchase Protection Insurance
Now that you have a better understanding of how purchase protection insurance works, we’ll go over some common cases covered by most eligible cards.
Here’s what we’ve come up with in our research, but always consult your credit card’s insurance certificate for specifics:
- Accidental Damage: For example, if you’ve purchased a sofa for your new home and its upholstery got torn in the moving process.
- Theft: For cases when a covered item is stolen and you’ve filed a police report (refer back to our laptop scenario).
Sometimes, lost items can also be covered by purchase protection insurance, but this will depend on your card’s policies. That said, you’ll need to have some idea of what happened to your item for your insurance claim. For instance, you might have lost one of your AirPods while hurrying to board the subway, ultimately sending it tumbling onto the tracks just before the doors closed.
What’s Excluded From Credit Card Purchase Protection Insurance
Many cases won’t be covered by your credit card’s purchase protection insurance, here are some common exclusions:
- The protection of vintage, antique or one-of-a-kind items
- Pets
- Perishable items
- Cars and other motor vehicles
- Items purchased that were intended for commercial or business use
- Items destroyed by weather or natural disasters
- Items with manufacturer defects
- Items that have incurred expected wear and tearCashItems stolen from a car
The list could go on, but for the best insight on what your card offers, you’ll want to check in with your card's insurance certificate (as always).
Credit Card Purchase Protection Insurance vs. Credit Card Extended Warranty Coverage
In our round-up of exclusions from purchase protection insurance, you might have noticed “items with manufacturer defects” on the list. While this particular case isn’t covered by purchase protection insurance, it is covered by extended warranty coverage.
Credit card purchase protection insurance offers coverage on items that were originally in good working condition and well-maintained, subject to incidents that happen post-purchase, like accidental damage or theft. Credit card extended warranty coverage lengthens an item’s manufacturer warranty by a certain amount of time.
A manufacturer warranty covers any defects or malfunctions accumulated in the item’s construction (so damages that occurred pre-purchase).
Credit Card Companies That Offer Purchase Protection Insurance
You’ll find that purchase protection insurance is provided by most credit card companies. Keep in mind that the value of your coverage will vary between cards. You’ll want to review individual insurance certificates to decide which purchase protection policy is the best fit for you.
Best Credit Cards for Purchase Protection Insurance
Let’s dive a little deeper into where you can get the best purchase protection policies. Every cardholder’s perfect credit card can vary. On top of purchase protection insurance (and perhaps even more than purchase protection insurance), you’ll want to consider cards that cater to your unique spending habits through rewards programs, benefits, and other types of coverage (like travel coverage).
If you don’t mind spending a decent amount on an annual fee for exceptional annual value (especially in the first year), top-tier flexible point redemptions, and plenty of coverage (including purchase protection insurance), then the American Express Cobalt Card (also known as the best credit card in Canada) could be the perfect card for you.
Or if you’d rather something other than Amex (since it’s not as widely accepted), you could always opt for the MBNA Rewards World Elite Mastercard, another purchase protection insured points card for a slightly lower annual fee. It offers generous rewards on popular categories, and similar coverage categories (some with higher value).
If you prefer cashback instead of points, the SimplyCash Preferred Card has the highest cashback rates on groceries and gas in Canada, plus a great base cashback rate on all other eligible purchases. It also comes with a standard 90-day purchase protection plan. Likewise, the BMO Cashback World Elite Mastercard features some of the highest cashback rates on groceries and gas. It also provides nearly the same amount of insurance (some categories with extra value), and the same purchase protection policy.
Looking for no fees? No problem. The Rogers Red World Elite Mastercard is voted our best no-annual-fee credit card in Canada, with great rates for Rogers, Fido and Shaw customers, and admirable coverage alongside purchase protection insurance (like trip interruption and trip cancellation insurance).
Lastly, if you were hoping for something with purchase protection that lasts longer than 90 days, try the National Bank World Elite Mastercard, complete with high earn rates, an annual travel credit, and 180 days of purchase protection coverage, plus comprehensive travel insurance. Another option for this extended 180-day coverage is the CIBC Aeroplan Visa Infinite Privilege Card, which also comes with helpful Aeroplan points rewards, extensive insurance, and Air Canada perks like unlimited Maple Leaf lounge visits.
How to File a Credit Card Purchase Protection Insurance Claim
As previously mentioned, you’ll want to file a credit card purchase protection insurance claim as soon as you can to keep up with policy deadlines.
Here’s a standard step-by-step process for filing this type of insurance claim:
- Read your provider’s insurance policies: Even if you’ve already read it (as per our suggestions) it never hurts to re-visit your card’s insurance certificate to make sure your unique situation is covered.
- Find the correct contact: most claims can be requested by phone or online using a dedicated claim form. The best way to determine how to file your claim is to call the number on the back of your card or to triple-check your card’s insurance certificate.
- Gather and file all the appropriate documentation: You’ll want to make sure you have all the proof you need to file your purchase protection insurance claim. This might include a claim form, the original purchase receipt from the retailer, a police report (for stolen items), your credit card’s statement with a record of the purchase, a repair estimate (for damaged items), and (when applicable) a copy of your homeowners or renters insurance policy.
Conclusion
If you've ever wanted extra protection for your purchases, purchase protection insurance is the perk you've been craving. It's included on some great cards that cater to various cardholder profiles, offering different support and different value depending on your provider.
Remember to always read your insurance certificate to stay in-the-know on what's covered, and to understand how to file a successful claim. Most importantly, with purchase protection insurance, shop with peace of mind.
Frequently Asked Questions
Is credit card purchase protection insurance worth it?
Credit card purchase protection is a useful added perk on participating credit cards. That said, you might not want to decide which credit card to apply for completely based on this one perk. However, when it’s paired with a rewards program, benefits list, and coverage plan that works for your lifestyle – it’s certainly a nice advantage to have.
What's on this Page
- How Credit Card Purchase Protection Insurance Works
- What’s Covered by Credit Card Purchase Protection Insurance
- What’s Excluded From Credit Card Purchase Protection Insurance
- Credit Card Purchase Protection Insurance vs. Credit Card Extended Warranty Coverage
- Credit Card Companies That Offer Purchase Protection Insurance
- Best Credit Cards for Purchase Protection Insurance
- How to File a Credit Card Purchase Protection Insurance Claim
- Conclusion
- Frequently Asked Questions