Credit Card Purchase Security Insurance

Do you use your credit card for daily purchases? Well, you could actually be protecting the items you purchase just by paying with your credit card. When you charge a new item to your credit card, you may be protecting yourself against potential loss, theft, or damages. Many rewards credit cards offer a wide range of insurance coverage, one of which is purchase security insurance. This insurance will protect you in the event that a newly purchased item is lost, stolen, or damaged, which is bound to save you money. Here’s a brief rundown on everything you need to know about purchase security insurance.


What is purchase security insurance?

Purchase security insurance protects you against possible loss, theft, or damage of new items purchased anywhere in the world for a certain period of time. If you find yourself in a situation where a recently purchased item has been lost, stolen, or damaged, you can file a claim to have your item replaced or repaired, or be reimbursed for the purchase price. You must have paid for the item in full using your credit card to be covered.

Be aware that most purchase security insurance plans have a yearly or lifetime limit. For example, you might have a maximum lifetime benefit of $60,000 on your card. This means you’ll only receive coverage up to $60,000 as long as you live. If you try to claim addition purchases, you will not be reimbursed.


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BMO World Elite MasterCard

  • Covered worldwide for 90 days from purchase date
  • Combined lifetime limit of $60,000 for purchase security and extended warranty insurance
  • Purchase must be paid for in full with your credit card

What is covered under purchase security insurance?

Purchase security insurance covers your personal property and gifts you’ve purchased. You must have used a credit card with purchase security insurance as payment for the item you wish to claim.


What is not covered by purchase security insurance?

There are a number of items that are typically not covered by credit card purchase security insurance. Most insurance providers usually omit coverage for the following items:

  • Cash or cash equivalents, travellers cheques, tickets, documents, bullion, rare coins, banknotes, negotiable instruments
  • Art objects (such as, but not limited, to hand-made items, limited editions, original, signature pieces, or collectible plates or other numismatic property)
  • Animals, fish, birds, or living plants
  • Consumable or perishable goods such as food and liquor
  • Mail order purchases or purchases made online, until delivered and accepted by you in perfect condition
  • Golf balls
  • Used items, newly purchased that have been rebuilt, refurbished or returned and resold
  • Automobiles, trailers, motorcycles, motorboats, or accessories attached to our mounted on such property, airplanes, motor scooters, snow blowers, riding lawnmowers, golf carts, lawn tractors, motorized wheelchairs or any other motorized vehicles except for miniature electronically powered vehicles intended for children or any of their respective parts or accessories
  • Any and all property items and/or equipment intended for commercial use
  • Services
  • Ancillary costs incurred in respect of an insured item and not forming part of the purchase price
  • Parts and/or labour required as a result of mechanical breakdown
  • Jewelry, gems, watches, and furs or garments transported/stored in baggage that’s not under your personal supervision
  • One-of-a-kind items that can’t be replaced

The insurance provider will also likely deny a claim that’s the result of the following:

  • Misuse, fraud or abuse
  • Hostilities of any kind (including but not limited to war, invasion, rebellion, insurrection)
  • Confiscation by authorities
  • Illegal activities
  • Normal wear and tear, or gradual deterioration
  • Loss or damage while undergoing any installation process or while being worked on
  • Insects or vermin
  • Flood, earthquake, radioactive contamination
  • Setting, expansion or contraction, bulging, buckling or cracking, temperature changes, freezing, heating, atmospheric changes, dampness or dryness, evaporation and/or leakage or contents, exposure to light, change in texture, finish colour, rust or corrosion
  • Loss or damage to sports equipment
  • Mysterious disappearance
  • Inherent product defects
  • Products purchased with an unconditional guarantee
  • Willful acts or omissions
  • Indirect, incidental or consequential damages, including bodily injury, property damage, economic loss, punitive or exemplary damages, and legal costs

What is reimbursed in a purchase security insurance claim?

You’re able to file a claim for any eligible purchase made using your credit card. However, the decision of whether to replace, repair, or reimburse the item is often left to the discretion of the insurance provider.


How do you make a travel purchase security claim?

You should call your insurance provider immediately after learning of any loss or occurrence to obtain the appropriate claim forms. Most insurance providers require you to report damage or theft within a given time period (typically 45 to 90 days).

In addition to any forms you must fill out, your insurance provider may require you to provide one or more of the following:

  • A copy of original store receipt
  • A copy of your credit card statement reflecting the item purchased
  • Original police report or other report to local authorities
  • Estimate of repairs, if applicable
  • Photo of the damaged item, if applicable
  • A copy of the original store receipt for the replacement item, if applicable
  • Serial number, if applicable
Note: If the claim is for a gift, the account holder (not the recipient) must file the claim.

The devil is in the details

The most important thing to note is that purchase security insurance can vary greatly depending on the card you have. You’ll want check the extent of your coverage before depending on it. Also, coverage is often limited to a fixed amount over the span of your lifetime. You may want to hold off on making claims on less expensive items in order to ensure you have coverage for more expensive items when you need it. Finally, remember that in order to be covered, you usually have to pay for an item using the credit card with purchase security insurance.

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