Credit Card Insurance: Know Its Features, Benefits, Types & Characteristics

Credit cards offer convenience, security, and flexibility while making purchases. However, with the increasing use of credit cards comes the need for protection against unforeseen circumstances that may affect your ability to make timely payments. This is where credit card insurance steps in, providing a safety net for cardholders in times of need. In this blog post, let us get into the features, benefits, types, and characteristics of credit card insurance coverage to help you understand its importance and make informed decisions.

What is credit card insurance?

A credit card insurance policy provides a layer of protection against various risks associated with card usage, including theft, loss, and fraudulent transactions. It offers peace of mind to cardholders by reimbursing them for unauthorised charges and providing assistance in case of identity theft or fraudulent activities.

Card Protection Plan (CPP) is a comprehensive solution designed to safeguard your finances. With CPP, you benefit from a one-call card block feature, emergency cash assistance, PAN card recovery, and roadside assistance, among other perks. By subscribing to CPP, cardholders can enjoy economical coverage and efficient resolution of card-related issues, ensuring a worry-free experience with their credit and debit cards.

Types of credit card insurance

Credit card insurance ensure that cardholders can enjoy their experiences without worrying about unpleasant events, providing them with financial security and support when needed. There are a wide range of credit card insurance benefits to provide comprehensive coverage and peace of mind to its cardholders:

Baggage loss/delay insurance: Travelling can sometimes lead to baggage-related issues such as delays or theft. Credit card insurance covers such incidents, allowing cardholders to file claims in case of delayed or lost baggage due to airline negligence.

Zero liability for stolen credit cards: Losing one's wallet can be a nightmare, especially if it contains credit cards. Many providers offer zero-liability coverage, ensuring that cardholders are not held responsible for unauthorised transactions made on their lost or stolen cards, once reported.

Travel insurance for flight delay or cancellation: Flight delays or cancellations can disrupt travel plans and incur additional expenses. Credit card insurance protects against such situations, offering coverage for various reasons including airline strikes, natural disasters, or mechanical issues.

Purchase protection: When making purchases, cardholders enjoy added peace of mind with purchase protection coverage. This insurance safeguards against common risks like fire, allied perils, and burglary for a specified period after the purchase date.

Key benefits of card protection plan

The Card Protection Plan (CPP) provides several benefits to credit and debit cardholders, ensuring peace of mind and financial security in case of card loss or theft. Here are the key benefits:

Emergency cash assistance: In the unfortunate event of losing your wallet containing your cash and cards, CPP provides emergency cash assistance. This quick access to funds helps manage immediate financial needs without interest charges.

Hotel/travel assistance: If you find yourself stranded without money or cards due to a lost wallet or misplaced credit card, CPP covers your hotel stay bills and travel expenses, facilitating a smooth return home without major disruptions.

One-call card block: Reporting lost cards can be a hassle, but with CPP, a single phone call to the protection plan provider is all it takes to block all registered cards. This saves time and effort, preventing potential misuse of lost cards.

PAN card recovery: Losing your PAN card along with your wallet can lead to additional complexities. CPP assists in obtaining a new PAN card, handling the necessary paperwork and procedures on your behalf, easing the process for cardholders.

Roadside assistance: CPP extends beyond card-related benefits by offering roadside assistance during travel emergencies. While currently not available in all cities, this service underscores the comprehensive support provided by CPP.

Protection against fraud and identity theft: Credit card insurance frequently incorporates features designed to safeguard against fraud and assist with identity theft issues. This insurance can aid in identity recovery, cover associated expenses, and facilitate resolution of the matter.

Extended warranty coverage: Certain credit cards provide extended warranty coverage for purchases made using the card. This extends the warranty period for eligible items, offering added protection beyond the manufacturer's warranty. In the event of defects or malfunctions, repairs or replacements may be covered by the insurance.

Key features of credit card insurance

The credit card insurance, also known as Card Protection Plan (CPP), provides several features to safeguard cardholders against various risks associated with credit and debit cards. Here are its key features:

Comprehensive coverage: The CPP provides protection against loss, theft, or misuse of credit cards, debit cards, and other cards, including membership cards.

Fraudulent transactions coverage: It covers unauthorised transactions made through lost or stolen cards, providing reimbursement for any financial losses incurred.

Convenience: In case of card loss or theft, cardholders only need to contact the CPP service provider's helpline to lodge a claim. The provider takes responsibility for contacting all concerned banks to initiate card blocking and cancellation procedures on behalf of the cardholder.

Retroactive coverage: The CPP not only covers unauthorised transactions after the loss is reported but also those that occurred up to seven days before the report, minimising disputes over transaction timing.

Simple application process: Subscribing to CPP is easy and quick, requiring completion of an online application form and payment of the premium amount. Once registered, cardholders receive a welcome kit containing registration forms and membership terms.

Flexible options: CPP offers different plans with varying coverage limits to suit cardholders' needs. Cardholders can choose a plan based on their lifestyle and risk factors, ensuring adequate protection for their cards.

Wrapping up

Credit card insurance offers invaluable peace of mind and financial security to cardholders. With comprehensive coverage against loss, theft, and fraudulent transactions, CPP ensures that cardholders can enjoy the benefits of credit and debit cards without worrying about unforeseen events. The key benefits of CPP, including emergency cash assistance, one-call card block, and PAN card recovery. Additionally, the simple application process and flexible coverage options make it accessible and customisable to individual needs.

This Article is for information purpose only. The views expressed in this Article do not necessarily constitute the views of Kotak Mahindra Bank Ltd. (“Bank”) or its employees. The Bank makes no warranty of any kind with respect to the completeness or accuracy of the material and articles contained in this Article. The information contained in this Article is sourced from empaneled external experts for the benefit of the customers and it does not constitute legal advice from the Bank. The Bank, its directors, employees and the contributors shall not be responsible or liable for any damage or loss resulting from or arising due to reliance on or use of any information contained herein.