Credit card purchase protection insurance

What is purchase protection and how does it work?

Purchase protection is a type of insurance that provides coverage on new items you buy using your credit card. While the terms and conditions vary between cards, here are some things to be aware of:

What is eligible? Most retail items you buy for yourself are covered, such as clothing, jewellery, laptops or art. But there can be cover limits for some of these items.

What is not eligible? Purchases that are not usually covered include second-hand items and antiques, phones bought on a postpaid plan, cars and other motor vehicles, plants, animals and household fixtures and fittings (for example, ovens and dishwashers).

What is covered? Purchase protection typically protects new products you buy with your credit card against theft, loss or accidental damage. Some policies only protect items that were purchased in Australia.

How long for? Purchase protection usually covers items for around 90 days (3 months) from the purchase date, although some cards offer a longer period. Check your card's insurance terms for the exact cover period.

How much for? This also varies among insurers and cards, but it is typically limited per claim (for example, $10,000 per claim) and per year (for example, up to $50,000 per account per year).

Which credit cards offer complimentary purchase protection?

More premium credit cards are more likely to offer purchase protection cover. This includes rewards credit cards and platinum cards. These cards usually charge higher annual fees.

Only a handful of low rate credit cards offer this complimentary cover.

How to make a claim for credit card purchase protection insurance

The claims process differs depending on your credit card provider and the underwriting insurance company, but generally involves the following steps:

1. Contact the insurance company

Depending on your insurer and policy, you may have to file your claim within a certain time frame. For example, you may need to make a claim within 30 days of your item being stolen, lost or damaged.

2. Provide details of the claim

To make your claim, you have to show that the item was purchased using your credit card within the eligible period of coverage.

3. Submit any supporting documentation

Apart from original receipts, you may also need to provide other relevant documents such as police or incident reports.

4. Wait for a response

Your claim will usually take up to 14 business days to be assessed, after which you will be notified of the result and reimbursed if successful.

Finder survey: Which credit card insurance features have Australians of different ages used?

Other types of complimentary credit card purchase insurance

Some credit cards may also provide the following complimentary insurance covers for your purchases:

• Extended warranty cover. This extends the warranty cover for items purchased using your card, meaning that you can enjoy extended warranty protection beyond the manufacturer’s warranty period.
• Price guarantee schemes. This offers price protection so that you may be able to claim the price difference for an item purchased on your card if you find it in another store nearby at a lower price within a certain period of time.
• Refund protection insurance. Refund protection ensures that you can still get a refund on items purchased using your card, even if the merchant refuses to process a refund.

Other factors to consider when comparing credit cards with purchase protection insurance

When considering purchase protection insurance, here are some other factors you should keep in mind:

• Claim requirements. Be aware of time limits within which to make your claim, as well as what documents you need to provide (such as a police report).
• Claim limits. Most policies have an annual cap on purchase protection claims as well as a cap on each individual claim.
• Rates and fees. A credit card that offers complimentary extras such as purchase protection is likely to have higher interest rates and annual fees than a no-frills card, which may outweigh the benefits.
• Rewards. If earning rewards with your card is important to you, you should consider factors such as the points earn rate and rewards redemption program.
• Cash advance rate and fee. If you withdraw money using your credit card or use your card for cash equivalent transactions, including gift or shopping vouchers and gambling, you may be charged extra fees.
• Other complimentary extras. With increased competition among cards, the list of complimentary extras grows longer all the time. You should seek out perks that you’ll actually use and enjoy, since you’re indirectly paying for them in the card’s annual fee.

Compared to travel-specific perks like airport lounge access and complimentary travel insurance, purchase protection insurance is something most people can enjoy on a day-to-day basis. When deciding if it’s something you actually need, it’s important to consider the costs of the card and whether this feature will be worth it in the long term.

Pictures: Shutterstock

Frequently asked questions

• Do Visa credit cards have purchase protection?

  Yes, many Visa credit cards offer purchase protection, particularly premium cards like Visa Platinum and Visa Signature. This coverage typically protects eligible items against theft, damage or loss within a specified period. Credit cards may also offer up to 24 months extended warranty insurance cover (in addition to the manufacturer's expressed Australian warranty) on a range of personal items purchased using your card.

• Do all credit cards have buyer protection?

  Not all credit cards offer buyer protection. This feature is usually available on premium cards that have a higher annual fee. If you want a card with this inclusion, it's a good idea to check the terms and conditions to see if purchase protection is included.

• How do I claim credit card purchase protection?

  To claim purchase protection, you should contact your credit card issuer, provide proof of purchase and document the damage, loss, or theft of the item. Each issuer has its own process, so it's best to check your credit card's policy for specific instructions.

• What does payment protection cover on a credit card?

  Payment protection on a credit card typically covers your minimum payments in cases of unemployment, illness, injury, or even death. This optional insurance can help you manage your credit card debt during unexpected financial hardships.

• How long does credit card purchase protection last?

  Credit card purchase protection generally lasts around 90 days (3 months) after the date of purchase, although some cards offer a longer period, depending on the card issuer and the specific product. The terms and conditions, including coverage limits, can vary.

Written by

Amy Bradney-George

Journalist

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Amy is an experienced journalist with over 16 years of experience, contributing to major publications like Money Magazine, The Sydney Morning Herald, and ABC News Australia. Specialising in personal finance, she frequently appeared in media outlets and on radio. Amy holds a Bachelor of Arts in Journalism and Drama from Griffith University and earned RG146 certifications in Tier 1 Generic Knowledge and Tier 2 General Advice Deposit Products, ensuring her expertise is grounded in current financial regulations. Amy was Finder's Senior Writer for Credit Cards from 2016 to 2024. See full bio

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Rebecca Pike

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Rebecca Pike is Finder’s money editor, with over 7 years of experience in mortgages and personal finance. A frequent TV and radio commentator, she frequently appears on Sunrise and 7News, Today and 9News, as well as Sky News, Channel 10 and across radio and print. Rebecca previously served as Editor of Mortgage Professional Australia. She has a Master’s degree in Journalism as well as ASIC-recognised certifications in Tier 1 Generic Knowledge and Tier 2 General Advice Deposit Products, which comply with ASIC guidelines. See full bio

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