Among the many perks that credit cards may offer is a type of insurance known as purchase protection. This little-known card benefit protects you from financial losses if a product you purchased with your card is stolen or damaged.
Purchase protection isn’t unlimited. In fact, it’s usually subject to many restrictions, conditions, and exclusions. Still, this benefit could give you a little extra peace of mind when you make a big purchase, and if your purchase is covered, it could replace, repair, or reimburse the cost of the item in part or in whole, if what you buy is stolen or becomes damaged.
Purchase protection could also be valuable if you shop online and you’re concerned about so-called “porch pirates,” who steal packages delivered to people’s homes. These opportunistic thieves tend to be especially active during the holiday season, when friends, family members, and business associates ship gifts to one another.
How Does Card Purchase Protection Work?
If your card features purchase protection, it’s usually provided automatically and at no additional cost whenever you make a purchase with your card. If the item you bought is stolen or becomes damaged within a specified time frame, you can file a claim for reimbursement.
The time frame is usually 90 to 120 days, depending on the card. You may be able to file a claim online or you may have to call the card company. Damage may result from a variety of causes, such as fire, smoke, vandalism, bad weather, or accidents related to water or steam discharge from plumbing or electrical currents (electronic components may be excluded).
Card purchase protection is secondary insurance. That means claims are paid only after your primary insurance pays out any amount for a covered loss. Examples of primary insurance include homeowners, renters, and auto policies.
To support your card purchase protection claim, you’ll typically have to complete some paperwork and provide some documentation. Examples of documents that may be requested include:
- Claim form
- Copy of your original purchase receipt
- Copy of your card statement showing the purchase
- Copy of a police report for stolen items
- Photo for damaged items
- Repair estimate or paid receipt for repairs for items that are repairable
- Evidence of primary insurance policy limits or claim settlement
Again, the details vary from one card to another.
What Does Credit Card Protection Cover?
Card purchase protection generally covers everything you buy — except for a long list of items that are specifically excluded. Gifts that you buy and give to someone else are typically covered. Gifts that someone else purchases and gives to you aren’t.
Claims are usually limited to the cost of the item. Sales tax and shipping or delivery costs usually aren’t covered. Claims are typically limited on a per-claim basis and per-cardholder basis. These limits are often applied annually.
If you purchased an item that appreciated in value, only the purchase price — not the appreciated value — is covered. Examples include artwork or expensive jewelry.
Purchase protection policies generally come with a long list of exclusions. Such exclusions may include:
- Items left out where anyone can see them, such as on your porch in plain view
- Items that are lost or mysteriously disappear with no evidence of theft or damage
- Items stolen from a public place, such as a gym, church, or school
- Items stolen from a construction site
- Items stolen, damaged, or miss-delivered by a delivery service
- Items damaged by purposeful alteration, such as cutting or sawing
- Antiques or collectibles
- Items stolen from your car
- Items confiscated by a governmental authority
- Motorized vehicles or equipment installed in a motorized vehicle
- Traveler’s checks, tickets, or gift cards
- Items damaged by pets
- Consumable or perishable items, such as food or batteries
- Used or refurbished items
- Items purchased for resale
- Apps or computer software
- Hospital, medical, or dental equipment or devices, such as blood pressure or blood glucose monitoring devices or dental retainers
To find out whether your card’s purchase protection policy covers a specific item, you’ll need to read the policy or contact the card issuer.
Which Cards Offer Purchase Protection?
Card purchase protection policies vary from card to card. Some cards offer superior protection. Others come with modest coverage. Still, others don’t offer this benefit at all.
Using the right card when you make a purchase could mean the difference between full purchase protection or none at all. Here’s a snapshot of what some card issuers offer:
American Express Card Purchase Protection
American Express offers more than 60 cards, typically with some level of purchase protection. Certain luxury cards may have purchase protection limits as high as $10,000 per occurrence and $50,000 per calendar year.
Losses related to a natural disaster may be subject to a separate limit of $500. Prepaid cards may have lower limits of $1,000 per occurrence and $50,000 per cardholder account per calendar year. To file a claim, call (800) 322-1277 or file online.
Capital One Card Purchase Protection
Most Capital One cards come with purchase protection, which this company calls “purchase security” or “purchase assurance.” Per-claim limits may range from $10,000 to $500, depending on the card.
Claims generally must be reported within 60 days of the theft or damage. Documentation is due within 180 days of the claim date.
Chase Card Purchase Protection
Chase offers approximately 30 different cards, including co-branded airline, hotel, entertainment, retail, and business cards.
Most Chase cards offer purchase protection of up to $500 per claim and $50,000 per account for damage or theft for 120 days after the date of purchase. A few cards may offer coverage limits of $10,000 per claim and $50,000 per year.
- Earn a $150 Bonus after you spend $500 on purchases in your first 3 months from account opening.
- Earn unlimited 1.5% cash back on all purchases.
- 0% Intro APR for 15 months from account opening on purchases, then a variable APR of 14.99 - 23.74%.
- No annual fee
- No minimum to redeem for cash back
- Cash Back rewards do not expire as long as your account is open
0% 15 Months
- Earn 50,000 bonus points after you spend $4,000 on purchases in the first 3 months from account opening. That's $750 toward travel when you redeem through Chase Ultimate Rewards®
- $300 Annual Travel Credit as reimbursement for travel purchases charged to your card each account anniversary year
- 3X points on travel immediately after earning your $300 travel credit. 3X points on dining at restaurants & 1 point per $1 spent on all other purchases. $0 foreign transaction fees.
- Get 50% more value when you redeem your points for travel through Chase Ultimate Rewards. For example, 50,000 points are worth $750 toward travel
- 1:1 point transfer to leading airline and hotel loyalty programs
- Access to 1,000+ airport lounges worldwide after an easy, one-time enrollment in Priority Pass™ Select
- Earn 60,000 bonus points after you spend $4,000 on purchases in the first 3 months from account opening. That's $750 toward travel when you redeem through Chase Ultimate Rewards®
- 2X points on travel and dining at restaurants worldwide & 1 point per dollar spent on all other purchases.
- Get 25% more value when you redeem for airfare, hotels, car rentals and cruises through Chase Ultimate Rewards. For example, 60,000 points are worth $750 toward travel
- Get unlimited deliveries with a $0 delivery fee and reduced service fees on orders over $12 for a minimum of one year on qualifying food purchases with DashPass, DoorDash's subscription service. Activate by 12/31/21.
- Earn 5X points on Lyft rides through March 2022. That's 3X points in addition to the 2X points you already earn on travel.
15.99% - 22.99% Variable
Citi Card Purchase Protection
Citi offers more than a dozen different cards. Most do not include purchase protection as it’s usually defined, but there may be some exceptions. If you’re looking for a Citi card with this benefit, you’ll need to read the disclosures to find one that includes it.
Discover Card Purchase Protection
Discover discontinued purchase protection benefits for all of its cards as of Feb. 28, 2018. Card purchase protection may not be the number one reason to apply for a card due to the many exclusions, low limits, and secondary status of this type of insurance. Still, this coverage can be a good benefit to have along with the many other benefits cards offer.
Insurance for the Things You Buy
Nothing spoils the enjoyment of shopping quite like the thought that your favorite new whatever might be stolen or become damaged before you have more than a few months to enjoy it. That’s where credit card purchase protection comes in.
Purchase protection isn’t a perfect perk due to the many exclusions and limitations that come with using it, but it’s still a nice benefit to have, and it could make applying for a new card worthwhile, especially if you’re contemplating a big purchase. Rather than worry about the risks, you’ll be able to shop with the assurance that your purchase is protected.