Credit Card Insurance- Meaning, Working, Types, Top Banks

Insurance plays a crucial role in our lives, acting as a financial safety net against unforeseen circumstances. It protects us from the burden of unexpected costs, whether it's a car accident, a medical emergency, or even a damaged appliance. Similarly, credit card insurance offers a layer of protection specifically designed for credit card users. But with diverse offerings and varying costs, understanding the intricacies of credit card insurance is essential before deciding if it's the right fit for you.

In this blog, we will explain everything you need to know about credit card insurance, including how it works, the various types of coverage that are available, and the benefits. Additionally, we will highlight the top banks that offer credit card insurance. So, sit tight and get ready to learn more about it!

Table of Contents

• What is Credit Card Insurance?
• How Does a Credit Card Insurance Plan Work? 
• Types of Insurance Cover Available with Credit Cards
• Top Banks Offering Insurance Credit Cards

What is Credit Card Insurance?

Credit Card Insurance protects credit cardholders from fraud, identity theft, and other unauthorised transactions. In the event that a credit card is lost or stolen, or if unauthorised charges are made on the card, credit card insurance can reimburse the cardholder for any financial losses incurred. 
It may also offer additional benefits such as travel insurance, emergency cash assistance, and purchase protection. It is important to note that credit card insurance policies vary depending on the provider, so it is important to carefully review the terms and conditions of any credit card insurance policy before signing up.

How does a Credit Card Insurance plan work? 

Credit card insurance plans work by offering cardholders financial protection against a variety of unforeseen events, typically in exchange for an annual or monthly premium. Here's a breakdown of how they function:

Coverage:

• Unauthorised transactions: If your card is lost, stolen, or compromised, and unauthorised charges are made, the insurance reimburses you for the fraudulent amount, offering protection against financial loss.
• Purchase protection: Certain plans cover damage or theft of items purchased with your card for a specified period, providing a replacement, repair, or reimbursement for the covered item.
• Additional benefits: Some plans may extend warranties on purchases, offer travel insurance benefits like baggage delay or loss coverage, and even provide identity theft assistance in case your information is compromised.

Claims process:

• In the event of an incident covered by your plan, you'll need to notify your credit card issuer or insurance provider immediately.
• You'll likely be required to file a claim and submit documentation like police reports, receipts, and other relevant documents to support your claim.
• Once the claim is reviewed and approved, you'll receive reimbursement for the covered amount, according to the terms and limits of your plan.

Types of Insurance Cover Available with Credit Cards

Below are some of the most common types of insurance coverage available with credit cards:

1. Zero Lost Card Liability: Zero lost card liability insurance, often simply called "zero liability," is a feature offered by many credit card issuers that protects cardholders from being financially responsible for unauthorised charges made on their lost or stolen cards.

2. Purchase protection: Purchase protection is another popular type of credit card insurance that reimburses cardholders for the cost of items that are damaged, stolen, or lost within a certain timeframe after purchase. This type of coverage is usually limited to a specific amount per item and a maximum amount per year.

3. Extended warranty: Extended warranty coverage is offered by some credit card issuers and extends the manufacturer's warranty on certain items purchased with the card. This type of coverage can be useful for expensive items like electronics, appliances, and other high-value purchases.

4. Travel insurance: Many credit cards offer travel insurance as part of their benefits package. This type of coverage can include trip cancellation or interruption, lost or delayed baggage, travel accident insurance, and emergency medical coverage.

It's important to note that the exact coverage and limits of credit card insurance policies vary depending on the issuer and type of card. It's always a good idea to review the terms and conditions of your credit card insurance policy carefully to ensure that you understand what is covered and what is not.

Top Banks Offering Insurance Credit Cards

Some of the banks that offer insurance on their credit cards in India are:

1. HDFC Bank

HDFC Bank offers a wide range of credit cards with insurance benefits, including credit shield insurance, lost card protection, and purchase protection. Some of the cards are:

1. HDFC Bank Diners Club Black Metal Edition Credit Card offers-

Type	Cover
Credit Liability Cover	₹9 lakh
Air Accident Insurance Cover	₹2 crore
Emergency Overseas Hospitalisation	₹50 lakh
Travel Insurance Cover	Up to ₹55,000 on baggage delay beyond 8 hours for international flights (Capped to $10/hour)

2. The HDFC Moneyback+ Credit Card comes with a Zero Lost Card Liability Cover. If you lose your card, you should immediately report it to the HDFC 24-hour call centre. By doing so, you will have zero liability for any fraudulent transactions that may be made using your Credit Card.

Read about the Best HDFC Bank Credit Cards 2024.

2. IDFC FIRST Bank

IDFC FIRST Bank Credit Cards provide extensive insurance coverage, including personal accident, lost card liability, and personal air accident insurance benefits for cardholders.

IDFC FIRST Millennia Credit Card 

Type	Cover
Personal Accident Cover	₹2 lakh
Lost Card Liability Cover	₹25,000
Road Side Assistance	Up to 4 times in a year worth ₹1,399
Credit Shield Cover	₹25,000
Purchase Protection	₹25,000

Read about IDFC FIRST Bank Credit Cards.

3. Axis Bank

Axis Bank offers a variety of credit cards, some of which come with complimentary insurance coverage. Here's a summary:

1. Axis Bank Magnus Credit Card

Type	Cover
Counterfeit/lost card liability	Up to credit limit
Purchase Protection	₹2 lakh
Loss/Delay in baggage and personal documents	$500
Credit Shield	₹5 lakh

2. Axis Bank Reserve Credit Card

Type	Cover
Counterfeit/lost card liability	Up to credit limit
Purchase Protection	₹2 lakh
Loss/Delay in baggage and personal documents	$500
Credit Shield	₹5 lakh

3. Axis Bank Rewards Credit Card

Type	Cover
Purchase Protection	₹1 lakh
Delay of check-in baggage	$300
Loss of travel documents	$300
Loss of check-in baggage	$500
Credit Shield	₹1 lakh

Read about  Axis Bank Credit Cards.

4. American Express Bank

The American Express Bank offers a variety of insurance solutions for travel and more to ensure you and your family are well covered. Here is a summary of cards that include insurance:

⏩ The American Express SmartEarn Credit Card, American Express Membership Rewards Credit Card, and American Express Platinum Travel Credit Card offer a Zero Lost Card Liability feature to ensure that you are not held accountable for any fraudulent activity on your card, provided that you report it within three working days. If you report the fraud after three working days, your maximum liability will be restricted to ₹1,000.

Conclusion

Having insurance is essential to ensure financial stability in unexpected situations. Credit card insurance provides an additional layer of protection for those who own credit cards. It is important to note that policies differ greatly, so it is advisable to read the terms and conditions carefully before enrolling. With the appropriate credit card insurance, you can use your credit cards conveniently while also keeping your finances safe