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If you book a trip and have to cancel, trip cancellation insurance can help you recoup what you can't get back. Several credit cards offer this benefit. For most issuers, the protections are complimentary and kick in when you use that card to pay for your trip.
Chase has long offered some of the most robust trip cancellation insurance. Even if you pay for a small portion of your trip — like award taxes and fees — with a card that offers this coverage, Chase's travel insurance would cover the whole trip. It's hard to understate how valuable that is.
However, if you have a Chase card that offers trip cancellation insurance, check and see if you've received an updated Guide to Benefits. Chase is changing how its trip cancellation reimbursement benefit works on eligible cards. Here's how.
Chase Adds Restrictive Language to Trip Cancellation Insurance Benefit on Multiple Cards
At least two of our favorite travel cards — the Chase Sapphire Reserve® and the Chase Sapphire Preferred® Card — have an updated Guide to Benefits.
In these updated Guide to Benefits is new restrictive language on how each Chase card's trip cancellation benefit works. In short, under the coverage terms — how much coverage your card provides per covered traveler per trip and up to how much per 12-month period — Chase added the following line:
“[Coverage is limited to…] the actual amount charged to the Covered Card and/or Redeemable rewards used for a covered travel expense.”
Okay, so what exactly does this mean? Effective immediately, the Chase trip cancellation insurance you'll receive if your trip is canceled for a covered reason is limited to:
- The dollar amount charged to your Chase card and/or
- The Ultimate Rewards points redeemed
The update contrasts with how the benefit used to work a short time ago, when full coverage kicked in, even if you charged just a few dollars of trip expenses to your Chase card. This lucrative coverage is why we recommended using a card like the Sapphire Reserve to pay your award taxes and fees — even if it was a minimal out-of-pocket expense.
Related: Top Credit Cards for Trip Interruption And Cancellation Insurance
Chase’s New Trip Cancellation Reimbursement Policy Explained
Trip cancellation insurance isn't a flashy benefit. It's likely one you'll forget about until you actually need to use it. But suppose a named storm rains on your parade and forces you to cancel your non-refundable trip. How will Chase's new confusing-sounding trip cancellation policy impact you?
In short, your trip cancellation insurance will kick in if you book travel using one (or multiple) of the three following payment methods:
- An eligible Chase credit card, like the Sapphire Reserve or Sapphire Preferred.
- Ultimate Rewards points redeemed through Chase Travel℠.
- Ultimate Rewards points transferred to travel partners.
If you cancel your trip because you're subject to one of Chase's covered reasons — such as a named storm warning — you can claim reimbursement for non-refundable expenses by contacting the Benefit Administrator. They will walk you through the filing process.
Now, here's where Chase's recent changes come in. The maximum reimbursement you can get back is the amount charged to your eligible Chase card, the portion paid with Ultimate Rewards points, and/or the number of points transferred to a travel partner.
Regarding the last of those, Chase states that you will need to prove that the Ultimate Rewards points you transferred were used to book the now-canceled trip.
Related: How To Transfer Chase Ultimate Rewards Points: A Step-By-Step Guide
Example scenario
Sometimes, an example helps illustrate the point, so here's one to consider. Suppose you book a partner airline award with Iberia Avios. For the unfamiliar, partner awards booked with Iberia Avios are non-refundable. If you cancel, you'll forfeit your Avios and what you spent on award taxes and fees.
Say you had the necessary Avios in your Iberia account, and to complete your redemption, you just needed to pay the taxes and fees worth $100. If you use your eligible Chase card, you're covered up to the $100 you spent on your ticket if you have to cancel your ticket for a covered reason. In this scenario, you can claim reimbursement for $100.
Alternatively, you transferred 50,000 Chase Ultimate Rewards to Iberia to book a partner award. If you used your eligible Chase card to pay the $100 worth of taxes and fees associated with this award, you're covered up to the 50,000 points you transferred to Iberia, plus the $100. If you cancel for a covered reason, you can claim reimbursement for the points transferred and the $100 spent.
In this case, the reimbursement gets a bit more complicated. Chase shared with AwardWallet that the benefit administrator will use the dollar value of the trip to determine reimbursement of the points aspect. That can be easily determined when redeeming points through the Chase Travel℠ portal. However, it's unclear how that will work in practice when redeeming transferred points for an award flight.
Bottom Line
The card you use to book your trip matters, as does the points currency you redeem. Chase has added new restrictions to its trip cancellation benefit on popular cards like the Sapphire Reserve and the Sapphire Preferred.
While these changes may seem inconsequential, they're not. As of today, you can't claim full reimbursement for a non-refundable trip even if you used your eligible Chase card to cover part of it and canceled for a covered reason.
Re-reading that last line shows you just how lucrative this coverage used to be. And while it's still good, if not in line with what other issuers afford eligible cardholders, it's not what it used to be. Keep this in mind the next time you have a trip go sideways; it'll help set your expectations.
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