Baggage insurance reimburses you for the costs of stolen, lost, damaged or delayed baggage while traveling. With most providers, this is usually split up between lost/stolen baggage insurance and baggage delay insurance. Regardless of the type of insurance, being eligible will typically require you to pay the full cost of travel on the credit card offering the benefit.
Lost or Stolen Baggage Insurance
Lost or stolen baggage insurance covers your checked-in or carry-on baggage and personal effects while in transit. Most providers also includes damaged baggage and personal effects as well.
You never know when your luggage could be picked up by someone else, especially if it looks similar to other bags. It's happened to me on a few occasions (luckily both times the person realized it wasn't their bag), so having access to the insurance is definitely a plus.
It's also very easy for your luggage to take damage if it's handled roughly. I've lost a wheel or had my luggage cracked on a few occasions. This can help pad all or some of the cost of getting new luggage.
Baggage Delay Insurance
Baggage delay insurance covers you for reasonable and necessary emergency purchases for essential clothing and sundry items due to your checked-in bags being delayed.
I've had my fair share of short connection flights (layovers/stopovers) in which my bags did not make it on the same plane as me. This is where baggage delay comes in handy as you may need to purchase things such as clothes, toiletries, and more to last you until your baggage makes it back to you.
Check The Terms
Baggage insurance differs between cards. Some cards may only offer baggage delay while others offer lost and stolen coverage only.
You'll want to check closely on the type of insurance a card offers to make sure it covers what you need.
Credit Cards With Baggage Insurance
Listed below are several of the best rewards cards that offer some type of baggage insurance. You can use the Rewards Calculator to calculate rewards based on spend and to learn more about the card.