TLTR: This article discusses what credit card insurance is, why you need it, and how to file a claim when you have it.
Credit card insurance is an essential form of coverage that was once commonly purchased by consumers, but in recent years it’s fallen out of favor with the public. While opting out may save you a couple of bucks, it’s not the wisest financial decision you could make.
What is Credit Card Insurance and Why Do You Need it?
It’s an unfortunate truth that many of us are living paycheck to paycheck, or nearly so. Signing up for a credit card policy can help you make monthly payments so that you can stay afloat in the event of a financial emergency such as loss of employment or sudden, unforeseen expenses. If you’re like most Americans, you carry significant credit card debt. According to the Federal Reserve System, the average balance on credit cards in 2020 was $5,897.
Purchasing this policy is a particularly good idea if you’re a business owner. Let’s say you own a business but don’t have a standard business owners policy. In any situation in which your business might be forced to shut its doors, you can at least pay off minimum debt on your credit cards and significantly reduce your overall financial burden.
Credit card insurance also offers minimal coverage for products you purchase using your card. For instance, if you buy a laptop using a credit card, it will be covered—but only for a few days. In this instance, it would be best to purchase laptop insurance for long-term coverage.
Types of Credit Card Insurance
- Credit Life Insurance: This covers the cardholder’s outstanding debt in case of their death.
- Credit Disability Insurance: In the event that you have an accident which leads to your being permanently disabled, minimum payments are made on your credit card balance. You likely won’t be allowed to make any further purchases on the card(s), though.
- Credit Involuntary Unemployment Insurance: If you find yourself unemployed, the policy will help you make minimum payments. This policy won’t cover work lost as the result of the termination of a contract.
- Credit Property Insurance: This covers items purchased with your card that turn out to be damaged. The insurance company will pay for your purchase.
How to Make a Credit Card Insurance Claim?
As explained by NerdWallet, to make a claim, you have to submit the following to your insurance company:
- A copy of your credit card statement
- Purchase receipt for the product you want to make a claim for
- A police report (applicable in case of theft)
- Death certificate (applicable in case of cardholder’s death)
- A copy of any previous claim settlements
- Your insurance certificate
- Any additional document which will help you establish your claim
To get proper credit card insurance coverage, you can contact your card provider. Companies often offer this policy to their customers, and you may even have it without realizing it. You can also reach out to insurance companies like us for more comprehensive coverage.
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To understand more about how this policy works, contact a local insurance agent today!
February 9th, 2023 · 5 mins read
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