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How credit card purchase protection works (and the best cards for coverage)

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Ever buy something new only for Murphy’s law to rear its ugly head and for the item to get damaged, lost, or stolen just a few days or weeks after you signed on the receipt? You might think you’re on your own, but several credit cards come with complimentary purchase protection that may cover some or all of the cost.  

While credit cards often get the most attention for the rewards and sign-up bonuses they offer, the advantage of paying with plastic goes beyond just the ability to rack up points or cash back. And the added benefit of purchase protection is just one of the reasons why.

Here’s a breakdown of the facts about purchase protection, how it works, and a list of the best credit cards for coverage.


What is purchase protection?

Purchase protection (sometimes referred to as purchase assurance) is a complimentary benefit that insures newly-purchased items against incidents of theft, accidental damage, or loss. A successful claim can result in either the replacement, repair, or a reimbursement of the item’s purchase price.

While coverage is automatic and doesn’t cost extra, it does last for a limited period of time – usually up to 90 days from when you first purchased the item. Coverage amounts often hover around up to $1,000 per claim with maximum lifetime coverage of $60,000. Specific terms can vary by credit card, however. 

It’s worth noting purchase protection isn’t the same as extended warranty insurance – which is also offered by many credit cards – as purchase protection is a form of short-term insurance that provides coverage relating to theft and loss versus, say, an inherent manufacturing issue, where an extended warranty claim may be more suitable. 

While purchase protection is available on a wide variety of credit cards, including many with no annual fees, it isn’t universal to all cards and coverage can vary on the cards which do offer it. You’ll want to check the cardholder agreement of the particular card in your wallet to see if you’re eligible for coverage.


Basic rules and exclusions around purchase protection

Purchase protection, like any type of insurance, has some terms and exclusions. Before we dive into the details of how to file a claim, it’s worth getting acquainted with what exactly credit card purchase protection will and won’t cover.

What purchase protection will cover

  • Newly-purchased items paid for in full using your credit card
  • Recently-purchased items bought within the past 90 days (note: coverage periods may vary by card)
  • Most non-perishable goods (think broken laptops or stolen smartphones)
  • Coverage will kick in provided your account is in good standing and you’re making at least the minimum payment each and every monthly statement period
  • Purchases made on your credit card anywhere in the world
  • Items given as a gift (though, you as the cardholder must be the one who makes the claim)
  • Items stolen from a vehicle or home (however, proof of forced entry is required)

What purchase protection won’t cover

  • Cash or any form of currency including traveller’s cheques
  • Pets 
  • Consumable or perishable goods (like bottles of wine or food)
  • Concert tickets or services
  • Golf balls or sporting equipment
  • Any type of vehicle, electric or otherwise
  • Used, pre-owned, or refurbished items
  • Any items purchased for business or commercial reasons
  • Natural wear and tear
  • Jewellery and fur clothing stored in baggage (unless the bag was in your hand while stolen)
  • Heating or cooling appliances
  • Items redeemed for using points or cash back (may vary by card issuer)
  • Damage stemming from infestation, pests, or flooding
  • Inherit product deficits or mechanical issues (this is where extended warranty could be useful)
  • One of a kind items
  • Goods confiscated by the authorities

Depending on the particular card’s terms, purchase protection may not cover online purchases until the delivery is accepted by you or any items lost due to a “mysterious disappearance” (aka, there isn’t a clear explanation why the item was lost and no reason to assume theft was involved). 

Note though, these are broadly-written terms and it never hurts to submit or inquire about a claim. You may be surprised to find your claim is approved and end up getting some money back. 


How to submit a purchase protection claim

The claim submission process does vary from bank to bank. In some cases, you must first contact the card issuer over the phone and request for a claim form, while in other cases you can file a claim directly online. 

When submitting a claim, time is of the essence. You should aim to submit a claim as soon as possible (often no more than 30 days from when the incident occurred). A claim must also be made before you pay for any repairs out of pocket.

As part of the claim process, you’ll often have to provide:

  • A copy of the original receipt (detailing the cost, purchase date, and description of purchase)
  • A description of the incident and where it occurred
  • A copy of your credit card statement showing the purchase
  • When applicable, a police/fire/loss-claim report
  • When applicable, a photo of the damaged item
  • When applicable, a written repair estimate
  • Whether you have other relevant insurance protection that will cover the cost (e.g. tenant’s insurance)

Admittedly, reading through credit card purchase protection terms, collecting all the required documentation, and submitting claims can be slightly tedious. But that’s often the case when submitting any type of insurance claim, and if you’re successful, it can be well worth your time as you could potentially save several hundred dollars. 


Best credit cards for purchase protection

National Bank World Mastercard

  • $115 annual fee (waived for 1st year)
  • Earn up to 2 points per dollar spent on purchases
  • Welcome offer: Earn $300 cashback if $4,000 in net purchases are charged to the Mastercard account over a 3-month period
  • Income requirement: $60,000

While purchase protection on most credit cards lasts for 90 days from the date you first purchased the item, the National Bank World Mastercard’s coverage lasts for an impressive 180 days. In another major plus, the card triples the manufacturer’s warranty offering up to two additional years versus the standard one additional year provided by most other comparable cards.

The National Bank World Mastercard earns 1.5 points per dollar on your first $20,000 in purchases every year and bumps up to 2 points per dollar on your annual spending between $20,001 to $30,000. Each point is worth 1% in travel rewards or about 0.8% for non-travel rewards (depending on which gift cards or merchandise you redeem).

The higher-tier National Bank World Elite Mastercard also offers similar purchase protection and extended warranty coverage.

BMO CashBack World Elite

Card details

  • $120 annual fee (waived for 1st year)
  • 5% cash back on the first $500 you spend on groceries per month
  • 4% on the first $300 spent on transit per month
  • 3% on the first $300 spent on gas per month
  • 2% on the first $300 spent on recurring bills per month
  • Unimited 1% cash back on everything else
  • Income requirement: $80,000

In addition to offering between 5% to 1% on all your everyday purchases and complimentary roadside assistance coverage, the BMO CashBack World Elite provides 180 days in purchase protection coverage (double the conventional 90 days) as well as enhanced warranty protection that extends the manufacturer’s warranty for up to two years. BMO also makes redeeming your rewards extremely easy, as you can apply your cash back towards your balance any time of the year in increments of as little as $1.

MBNA Rewards Platinum Plus

Card details

  • No annual fee
  • Earn 4 points†† for every $1 spent on eligible restaurant, grocery, digital media, membership and household utility purchases during the first 90 days  , and 2 points‡ for every $1 spent on eligible purchases in those categories thereafter – in both cases, these earn rates apply until $10,000 is spent annually in the applicable category. 1 point‡ for every $1 spent on all other eligible purchases
  • Welcome offer: Get up to 10,000 bonus points
  • 5,000 bonus points†† ($25 in cash back value) after you make $500 or more in eligible purchases within the first 90 days of your account opening

  • 5,000 bonus points††($25 in cash back value) once enrolled for paperless e-statements within the first 90 days of account opening

  • Income required: No specific amount
  • This offer is not available for residents of Quebec. For residents of Quebec, please click here.

This no fee credit card manages to combine impressive rewards on everyday spending with standard purchase protection benefits. Purchase protection lasts for 90 days and has a lifetime limit of $60,000.

The MBNA Rewards Platinum Plus earns between 2 to 1 points per dollar on your everyday spending, with 1 point worth 1% in travel rewards or about 0.85% in e-gift card vouchers. 

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