The lowdown.
What is a credit card with purchase protection?
Purchase protection insurance offers financial protection if an item you bought with your credit card is lost, stolen, or accidentally damaged.
For example, if you used your credit card to buy a new MacBook Pro and accidentally dropped and damaged it a few days later, you may be covered and reimbursed for the phone if your credit card includes purchase protection.
How does credit card purchase protection work?
Purchase protection covers eligible items purchased with your credit card. It typically covers personal items, but some policies also include business items. The coverage usually applies to items bought worldwide or given as gifts if purchased in full using the card.
The coverage period is generally around 90 days from the date of purchase, although some credit card providers offer extended terms.
Some limits and sub-limits apply per claim and per year (for instance, a policy may cover the full purchase price of up to $10,000 per covered item and up to $135,000 for all claims within a 12-month period). Lower sub-limits often apply to items like jewellery, watches, and art.
You may need to pay an excess when filing a claim, depending on the provider; however, the card issuer will determine the applicability of an excess.
