Published in: Credit Cards | Dec. 20, 2018

Chase Sapphire Preferred's Purchase Protection Is a Huge Perk

The Chase Sapphire Preferred® has the best-in-class purchase protection benefits for risks that include damage, theft, and loss.

broken cell phone

Image source: Getty Images.

The Chase Sapphire Preferred® credit card is best for racking up rewards on restaurant and travel purchases, but it can be good for other ordinary purchases, too. That's because it offers purchase protection for 120 days when you use it, even if the purchase is for a family member or a gift for any other party.

Purchase protection effectively acts as short-term insurance against the financial cost of theft, damage, or "involuntary and accidental parting with property," on up to $500 per purchase. That said, there are nuances in the terms and conditions you should know about to understand why this card has one of the best purchase protection policies.

Here's what purchase protection actually means

Let's say you use your Chase Sapphire Preferred® card to purchase a new iPhone 8 at a cost of $699. A few days later, you drop your beloved new smartphone on the ground, breaking the screen in the process.

Unless you pay for phone insurance or have some other protection for the phone, this repair will set you back $149 plus any applicable taxes at an Apple store. Luckily, since you purchased the iPhone 8 with your Chase Sapphire Preferred® card, you're eligible to make a claim to cover the cost of the repair, as long as the damage happened within 120 days of purchase.

The card's benefit guide explains:

Purchase Protection will replace, repair, or reimburse you up to a maximum of five hundred ($500) dollars for each claim and up to fifty thousand ($50,000) dollars for each Account. The decision to replace, repair, or reimburse you will be made at the Benefit Administrator's discretion.

The nitty-gritty details on purchase protection

As you might expect, not all purchases are covered. Chase specifically excludes some particularly expensive and difficult-to-value items like animals, antiques, boats, jewelry, medical equipment, and used or pre-owned items, for example. All this is explained in the benefits guide you receive with the card, but for the sake of brevity, it's worth noting that most ordinary consumer purchases are covered by the purchase protection benefit.

Damage and theft are pretty clear-cut, but the protection for lost items (which is called "involuntary and accidental parting with property" in the benefits guide) isn't as clear. Chase defines this loss as "the unintended separation from an item of personal property in which the item's location is known but recovery is impractical to complete."

Now, I'm no lawyer or insurance claims expert, but I suspect this clause is intended to cover things like having your Fitbit fall into a storm drain while you're out on a run around the neighborhood more so than losing it to the depths of the Atlantic Ocean, but given I haven't encountered these rather unique circumstances myself, I can't be sure. I do have personal and secondhand experience with purchase protection claims for damage, and getting the benefit has never been a problem. Either something is broken or it isn't -- that's pretty easy to prove.

Obviously, losing an item is trickier. The company that handles the claims wants to avoid paying out on stuff you have lost in your own home and will find later. That's an entirely logical thing to exclude, otherwise it would be way too easy to "lose" something and make a claim.

There are two other things you should know about as they relate to maximizing the protection from the card:

  • To be eligible for coverage, you must also charge some portion of the purchase price to your Chase Sapphire Preferred® card. The insurance will only cover purchases up to the amount charged to your account, or up to the program limit ($500 per claim, or $50,000 per account), whichever is less. In short, if you charge $5 of a $400 TV purchase to the card, then you'll only have $5 of coverage, not the full purchase price of $400. If you want the most purchase protection, then charge the full amount (up to $500) to the card.
  • Purchase Protection insurance only provides protection in excess of other insurance you might have. To give a topical example, if you pay $5 a month for cellphone insurance that will repair your phone with a $100 deductible, your Chase Sapphire Preferred® will cover the $100 deductible if it needs repair, but the rest has to be covered by the cellphone insurance. This is more than reasonable and, frankly, standard practice when it comes to purchase protection and other forms of free insurance you get with credit cards, but it's worth pointing out if you're less familiar with fine print.

Making a claim is usually as simple as having proof of your loss due to damage, theft, or involuntary parting with an item, and proof you paid for the item with your card. That means that you'll need to have an itemized receipt of your purchases, card statements to match the receipts, and have to spend a little time to fill out a claim form at a minimum.

If you claim an item is stolen, you'll also have to file a police report. That's a bit of a headache, but as you can imagine, this step eliminates a lot of fraudulent claims and preserves the benefit for people who use it as intended.

What the Chase Sapphire Preferred® offers that other cards don't offer

Purchase protection is not a unique benefit. In fact, most credit cards offer some form of purchase protection, but Chase® credit cards have some of the best terms for cardholders. The biggest difference is that Chase offers 120 days of purchase protection, whereas other issuers only offer 90 days. A lot can happen in 30 days, and having more protection is a really solid benefit.

The Chase Sapphire Preferred® is one of the company's top rewards cards for travel-based redemption. It also has other bells and whistles, like primary rental car insurance, a massive sign-up bonus, 120 days of purchase protection, and other features that separate it from the hundreds of other rewards cards on the market. It can be a great choice for higher-spending households who prefer to redeem their points for travel. Personally, it's one of my go-to credit cards.

That said, if purchase protection is all you're looking for, then another card may be a better fit. The Chase Freedom Unlimited® card offers the same purchase protection as the Chase Sapphire Preferred® and doesn't have an annual fee.

For smaller spenders or infrequent travelers who won't get as much out of the company's top-shelf rewards program, the $95 annual fee of the Chase Sapphire Preferred® card may be difficult to justify for the purchase protection benefit alone. For that purpose, the no-annual-fee Chase Freedom Unlimited® card really shines.

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