American Express Launches Purchase Protection Program
NEW YORK (AP) _ American Express Co. on Tuesday began offering all its domestic credit-card holders free limited insurance on almost any retail item charged on its card, in another attempt to grab a bigger market slice during the lucrative holiday season.
The unprecedented Purchase Protection service comes about a year after American Express began a first-of-its-kind Buyer’s Assurance program, which doubles, up to a year, the manufacturer’s warranty on certain products bought with the card.
Ed Cooperman, president of American Express’ Consumer Card Group, said the newest service insures most puchases against theft, fire, accidental damage or loss for 90 days after the purchase date.
Spokesmen for the two big competing bank cards, Visa International and MasterCard International, said there had no plans to offer similar services.
Earlier this year, American Express began issuing its Optima card, which, unlike its regular charge cards but similar to bank cards, allows cardholders to pay their balances over time.
American Express currently has about 26 million cardholders worldwide, compared with 156 million for Visa and 135 million for MasterCard.
In the third quarter, American Express’ after-tax profit fell to $265 million from $293 million last year. However, its American Express Travel Related Services Co. subsidiary, which runs its credit-card operations, saw its third-quarter profit jump 15 percent to $205 million from $178 million.
Beginning Tuesday, certain items charged with an American Express card by domestic cardholders became automaticaly covered under a policy issued by Philadelphia-based Insurance Company of North America, up to $50,000 per customer. National Warranty Corp. of Denver was contracted to administer the plan.
The free service is scheduled to run through May 23, American Express said.
Purchase Protection covers most card purchases, except things like travelers checks, tickets, animals or living plants. There is no coverage for loss or damage due to natural disasters like floods or earthquakes, war, normal wear and tear and abuse.