Safeguard your credit card finances with complimentary purchase protection insurance.
Purchase protection provides you with extra value and greater peace of mind when you choose to pay with plastic. It is a common complimentary credit card perk, especially when it comes to black, platinum and gold cards.
Inclusions will vary from card to card, but purchase protection usually offers insurance for up to three months when products bought with your card are lost, stolen or accidentally damaged.
What is purchase protection and how does it work?
Purchase protection is a service provided by a credit card company that safeguards any eligible purchase made with a credit card against theft, loss or accidental damage. The terms and conditions for purchase protection will vary between cards and this will directly affect what purchases are eligible, how long the insurance period is, and what the claim limits are.
- Eligible purchases. Most retail purchases will generally be covered, but you should carefully read the specific terms and conditions to find out exactly what applies. Perishables or consumables are typically excluded. Motor vehicles and vehicle parts could also be excluded.
- Insurance period. Purchase protection usually covers items for up to 90 days from the purchase date, but can extend up to 6 months with some insurers.
- Claim limits. This also varies among insurers and cards, but it is typically limited per claim (e.g., $10,000 per claim) and per year (e.g., up to $50,000 per account per year).
How do I make a claim for credit card purchase protection insurance?
The claims process differs depending on your credit card provider and the insurance company, but generally involves the following steps:
- Contact the insurance company. Depending on your insurer and policy, you may have to file your claim within a certain time frame — so don’t wait long.
- Provide details of the claim. You have to show that the item was purchased using your credit card within the eligible period of coverage.
- Submit any supporting documentation. Apart from original receipts, you may also need to provide other relevant documents such as police or incident reports.
- Wait for a response. Your claim will usually take up to 14 business days to be assessed, after which you will be notified of the result and reimbursed if successful.
Other types of complimentary credit card purchase insurance
Some credit cards may also provide the following complimentary insurance covers for your purchases:
- Extended warranty cover. This extends the warranty cover for items purchased using your card, meaning that you can enjoy extended warranty protection beyond the manufacturer’s warranty period.
- Price guarantee. This offers price protection so you claim the price difference for an item purchased on your card if you find it in another store nearby at a lower price within a certain period of time.
- Refund protection insurance. Refund protection ensures that you can still get a refund on items purchased using your card even if the merchant refuses to process a refund.
Other factors to consider when comparing credit cards with purchase protection insurance. 
When considering purchase protection insurance, you should keep in mind:
- Claim limits. Most policies have an annual cap on purchase protection claims as well as a cap on each individual claim. You may wish to look into protection for international purchases if you travel or shop online a lot.
- Annual fee. Complimentary extras such as purchase protection are likely to come with a higher annual fee than a no-frills card. This may outweigh the benefits of complimentary extras if you rarely or never use them.
- Purchase rate. When considering any credit card, interest rates are very important, especially if you are someone who carries a card balance. You may find that cards with complimentary freebies often charge higher rates.
- Rewards. If earning rewards with your card is important to you, you should consider factors such as the points and rewards program.
- Cash advance rate and fee. If you withdraw money using your credit card or use your card for cash equivalent transactions, including gift or shopping vouchers, you may be charged extra fees.
Compared to travel-specific perks like airport lounge access and complimentary travel insurance, purchase protection insurance is something that most people can enjoy on a day-to-day basis. When deciding if it’s something that you actually need, it’s important to consider the costs of the card and whether this feature will be worth it in the long term.
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