Credit Card Insurance Guide – Part 1 – Baggage Delay Claim

With many of us using the tips and techniques outlined on PointsNerd, you should know that there are additional and sometimes lucrative benefits that come with paying an annual fee during credit card churn cycles. The benefits I am talking about are in the form of insurance that you have access to when you book travel on premium credit cards.

Many of us have or know of someone that has experienced the dreaded baggage delay when your bags don’t show up at your final destination. While many of us lose it on the airline, I generally grin from ear-to-ear knowing I am well insured when travelling.

Having submitted over 20 legitimate claims for various types of insurance over the years, I want to share with you the upside of delays, cancellations and baggage issues and what making a claim looks like.

Baggage Delay

My last claim for a checked baggage delay was just over a year ago. Generally I find this occurs quite often during tight connections. I often connect through Toronto Pearson Airport and when there is a delay on my incoming flight and I am running for the gate for my connection I often dream about the shopping spree that may await me at my final destination.

For most credit cards in Canada, there is a standard 6 hour rule around baggage delay, meaning if your bags do not show up at your hotel within 6 hours, you have access to coverage listed in the insurance certificate.

The “Golden Contract”

Before I go any further, I have to stress the importance of the “golden contract”. You know that big credit card package you receive in the mail with your new card? Most of us throw away all the paper and just activate the card.

The package, however, holds the golden contract with the insurance certificates that you need to refer to in these types of situations. I will often scan a copy of these certificates on my computer or find an electronic copy online to keep with me.

What to do at the airport

Let’s look at my case in Ottawa. I arrived in the morning with no bags upon arrival. I kindly spoke to the agent at the Air Canada desk who informed me that my bags were in Toronto and they would be on a flight today. I received a tracking ticket, thanked him and took off to my meetings.

Based on my experience I knew I would not be seeing those bags until the evening. The airline may get the bag to the Ottawa airport at some point in the day but they are generally pretty slow at getting it to your hotel. They employ couriers for this. By the time the bag comes in, someone realizes that it arrived, and they call up a courier to book the delivery. The courier then has to arrive at the airport, pick up the bag and drive it across town to my hotel.

What are you entitled to?

So back to my claim that occurred in Ottawa, I was using the TD Aeroplan Infinite Privilege Card for this trip.  A reading of the baggage delay insurance certificate notes the following:

In the event of Baggage Delay, (Definition is 6 hours) You will be reimbursed for the cost to replace Essential Items provided those purchases are made before the baggage is returned to the Covered Person but in no event more than ninety-six (96) hours after arriving at the Final Destination.

Often in Insurance Certificates like this, you have to read the conditions under the relevant section and then lookup capitalized terms in the definitions section. I suspect they make this as confusing as possible for the claimant to reduce potential claims. In this case “Essential Items” are defined as follows:

Essential clothing and toiletries that the Covered Person was carrying in the baggage, which the Covered Person must replace during the period of Baggage Delay.

Based on the definitions of the Insurance Certificate, I knew I was entitled to the claim.  It is important to note that the terms and conditions are likely different for each card. While I mentioned the six hour rule as pretty standard in Canada, the limits and possible coverage varies.  For the  premium cards with a higher annual fee (over $300), there is often insurance coverage up to $1,000, as opposed to the cards with a lower annual fee ($120-$200 range) that have  coverage up to $500. In my case I had coverage for $1000, as I had a premium, Infinite Privilege level card.

What to do at your destination

To avoid being under dressed for my work meetings, I went to The Bay in downtown Ottawa to grab essential clothing. I picked up a beautiful blazer and dress shirt and asked the service person what would happen if I had to return this later in the day due to my bag situation. The service person said there would be no problem and off I went. Later that day I arrived back at my hotel at around dinner time (over 6 hours later). My bag was just coming in the front door. So what’s next?

What to do at the hotel

The first thing to do when you have a delay is to call the 800 number for the insurer, which is listed in the insurance certificate.

After calling the 800 number the agent took down all the information at Allianz Global Assistance. He asked for several pieces of information that I would need for the claim including,

• A copy of the baggage delay info from the airline (tracking ticket)
• A letter from the hotel detailing when the bag arrived
• Receipts for the “essential clothing”
• A copy of your credit card statement showing the full charge of the flight
• A copy of the flight booking

I let the agent know that I had to purchase $531.08 worth of clothing. He said he would email me the claim form and indicated that I could submit everything online.

I then went down to the front desk at the Fairmont and kindly asked the agent if they could write up the letter that detailed when the bag arrived. The concierge typed it as we spoke, printed off a letter as shown below and I was ready to put in my claim.

After submitting the claim

With the full cost of $531.08 in the claim, I knew I was ahead on the $249 annual fee I paid for the card. When you factor in the great welcome offer I received in Aeroplan points, I was well ahead of the game. I keep a spreadsheet with the dollar amount of ancillary benefits received  from each card and subtract it by the annual fee paid. I have coined this net dollar amount as the Return on Annual Fee (RAF).

Approximately 30 days later I received a cheque in the mail as follows:

Conclusion and Final Tips for Baggage Insurance Claims

I cannot stress enough the importance of carefully  reading and understanding the insurance certificate. Most credit cards, do not cover travel booked with points, but some do and you need to make sure to charge all of your booking fees and taxes with the card of choice. I have often run into situations where I know more about the coverage than the agent taking the claim over the phone. When this happens you just need to refer them to the page number that you are reading from in the insurance certificate.

Also, make sure to keep copies of everything you need to submit. With most claims you can send in electronic copies so you will still have originals, but it is important to keep everything.

It is also critically important that you plan ahead for travel.  You will want to make sure you are using a card that you are not intending to cancel by the time of your actual travel date or you are no longer insured. It is also interesting to note that the terms are very clear with most cards that insurance claims are eligible on outbound flights only.  However, if you are booking an one-way flight (which sometimes occurs using points) you may be entitled to a claim on an inbound flight.

For example, I had a baggage delay claim a few years ago where I flew an inbound flight to Toronto. In this case I also had access to a claim for “essential items”. This turned out to be a great claim, as I was headed to a New Year’s event when I landed. A quick stop at the mall allowed me to show up in a new outfit.

In my next post, I will look into Flight Cancellation and Delay Claims. I will take you through my last Flight Cancellation claim in Toronto due to freezing rain. This claim will detail my experience visiting a premier steakhouse in Toronto as I take you through “an insured person’s, reasonable expenses for meals and accommodation”.