American Express Co. is cutting back the travel insurance coverage on its consumer and small-business corporate cards, continuing a series of changes made to the cards this year.
The changes are designed to eliminate expensive coverage that customers don't value, the company said. A summary of the changes went into recent cardholder billing statements.
"We are realigning the benefits that we provide to make sure they are valuable," said Nancy Mueller, a spokeswoman.
The biggest change is that small-business corporate cardholders renting cars abroad after May 31 will no longer get free loss-and-damage coverage.
According to surveys, few cardholders were using the service or thought it valuable, Ms. Mueller said.
Similarly, the medical and legal referral portion of Global Assist Services has been dropped. Emergency financial services remain, she said.
With money saved by cutting some services, the company expects to add several soon, Ms. Mueller said.
She added that many have been added recently, such as discount arrangements and equipment financing for small-business owners. "We are dramatically expanding the services," Ms. Mueller said.
Another change is that seriously delinquent small-business cardholders will be reported to national credit bureaus. That will prod the customers to manage their finances wisely, Ms. Mueller said. Amex will also reward good customers by notifying the bureaus of their histories, she said.
In addition, late fees for small-business cardholders have been raised from $12 to the higher of $25 or 2.75% of the balance. When the account goes seriously delinquent, an additional $20 or 2.75% is levied.
For the small-business and consumer cards, a one-year $25 membership fee for the Membership Rewards program is no longer being waived. "Here you get a service that everyone really values way beyond the fee," Ms. Mueller said.
Holders of consumer cards will no longer get car rental loss-and-damage insurance in Ireland, Israel, and Jamaica, said Catherine J. Cummings, an American Express spokeswoman. Not enough cardholders used the card in those countries to balance high claim rates, Ms. Cummings said.
And American Express has reversed itself on an "all-or-nothing" insurance policy; it will now cover excess claims when cardholders buy partial insurance on a rented car. Previously, if a cardholder chose to take out partial insurance, American Express provided none for free.