Do Credit Cards Insure Lost Items?

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Some credit cards include a purchase protection plan that insures against losses due to theft and accidents. Lost items are also covered in specific circumstances. This does not usually include losses that are classified as a mysterious disappearance, however. You should review your credit card contract, because most credit cards do not have purchase protection.

Purchase Protection Plans

Higher-end credit cards usually offer extra services as an incentive for consumers to apply for and use an account. Credit card purchase protection plans are one of several advantages available with business and premium credit card accounts. Most protection plans involve additional coverage when you purchase items with a qualifying credit card. These plans operate like insurance policies and have specific written guidelines for what is covered and what is excluded. Credit card companies earn some of their revenues from merchants who pay a percentage of each purchase to the credit card issuer handling a transaction. Purchase protection plans are used by credit card companies as a reward to consumers for using their card during a purchase.

Mysterious Disappearance

When items vanish in an unexplained way, this is often referred to as a mysterious disappearance by insurance companies. In such situations, there is usually no evidence as to what actually happened. Most purchase protection plans exclude coverage for lost items that have mysteriously disappeared. Other specific exclusions depend on where the item was when lost. For example, items in cars, gym bags and unattended luggage are typically not protected. All plans exclude losses due to normal wear and tear.

Disputing Charges

Even if you have a credit card without purchase protection coverage, you are still protected under various laws against defective and damaged items. Qualifying purchases you make with a credit card can be disputed with your credit card company if you first attempt to resolve problems with the merchant that sold you the item. However, losses due to such causes as accidents and theft are generally not covered unless you use a credit card that has a purchase protection plan.

Your Coverage May Vary

Each credit card purchase protection plan provides a detailed explanation of how it operates and exceptions that are not covered. For example, common policy exclusions include animals and living plants, software and collectibles. There are usually time limits for reporting losses and requirements for documenting loss circumstances with photos or police reports.