Even the most seasoned travelers sometimes feel confused about travel insurance — the types of available insurance, what it covers, whether or not they need it.
Travel insurance provides protection in case of unforeseeable events that occur before or during a trip. Plans can be purchased to cover a single trip or for multiple trips with annual coverage. While coverage and plans vary by provider and location, here are some of the basics on travel insurance:
- There are five main types of travel insurance.
What you might need depends largely on the type of trip you’re taking, what kind of traveller you are, and how frequently you travel. The five main types of travel insurance are:
- Trip Cancellation and Trip Interruption
Trip cancellation covers full or partial reimbursement for the unused, non-refundable, prepaid travel costs for a trip you need to cancel prior to departure due to a covered reason. This coverage may also include supplier default (bankruptcy) coverage. Some trip cancellation policies include a “Cancel For Any Reason” benefit, which extends coverage to cancellations which are made for any reason, including changing your mind or simply no longer wanting to travel. Trip interruption covers certain costs if your trip is cut short while you are travelling due to a covered reason. This coverage will reimburse prepaid travel costs which are lost due to the interruption of a trip for a covered reason, and it may also reimburse out-of-pocket costs which may be required to catch you back up to a planned trip itinerary after an interruption, or to get you home if you need to end your trip early due to a covered reason.
- Emergency Medical
Emergency medical provides coverage for unexpected medical emergencies and related expenses which may occur while you are travelling outside of your home province or country. Provincial health coverage is extremely limited while travelling outside of your province of residence, even when travelling to a different province within Canada. Given the high cost of medical treatment, emergency medical coverage is strongly recommended for all inter-provincial and international travellers. Also, depending on your destination, the purchase of emergency medical coverage may be mandatory. A number of countries now require proof of emergency medical coverage along with valid passports and visas for entry.
- Baggage Loss, Damage or Delay
This insurance provides coverage for lost, stolen or damaged baggage, and it can reimburse you for the purchase of necessary items when your checked baggage is delayed.
- Flight and Travel Accident
This insurance provides coverage in the case of a flight or travel accident that results in the death or dismemberment of a covered traveller.
- Rental Vehicle Damage
This insurance provides coverage in the case of the physical loss or damage to a rented vehicle. This can include payments for legal fees and interest, payment of costs assessed in a civil action, salvage costs, fire department charges, customs duties, towing fees and costs related to loss of use of the rental vehicle.
The various types of travel insurance noted above can generally be purchased as a package which includes some or all types of coverage. In the alternative, individual insurance components are also available, such as a standalone emergency medical policy or a standalone trip cancellation/trip interruption policy. In addition, certain policies offer coverage to top-up other insurance that you may have, or to waive pre-existing conditions limitations. (Pre-existing conditions are known health conditions that existed before insurance goes into effect. Some travel insurance policies exclude coverage for certain pre-existing conditions, while others include coverage for pre-existing conditions, subject to disclosure of such conditions and medications to the insurer.)
- Before purchasing or declining travel insurance, review the terms of any other travel insurance that you may have (ie. travel-related insurance included with a credit card) for coverage availability, limitations and exclusions
If you have private health insurance, or travel insurance from another source (ie. included as a benefit with a credit card), you should review the details of the other policy before deciding whether to purchase a separate travel insurance plan. You should specifically determine whether the other policy will cover you while you travel, as well as for any coverage limitations and exclusions which may apply. Many policies offered in conjunction with credit cards may have specific limitations, such as lower benefit limits, coverage for a limited number of days, age limitations, pre-existing conditions limitations and purchase requirements (in some cases the travel services must be purchased using the credit card in order to obtain insurance coverage). If you do not understand the terms of any existing coverage you should direct any questions to the insurance provider or to your insurance broker or agent. If your existing coverage is not sufficient or will not apply to your trip, it is likely that you should purchase a separate travel insurance policy.
- Review your travel insurance policy and ask questions to understand your coverage
Insurance policies are detailed documents with many conditions, limitations, exclusions and eligibility requirements. Every insurance plan is unique and you should read your entire policy before you travel in order to understand the policy’s terms. If there is anything that you do not understand or if you have any other questions, you should ask the insurance company or your travel insurance advisor for clarification. Insurers will generally provide a 10 day no obligation review period in which you can review the policy and cancel it with a full refund in case it does not meet your needs.
- Understand your medical status and report it accurately
In addition to understanding the policy terms, you also need to understand the status of your medical conditions in order to answer all insurance application questions accurately. Furthermore, any changes in your medical conditions which may occur between the time that you buy your policy and the time that you leave on your trip must also be reported to the insurance company. Accurate reporting of medical status is essential as it affects coverage eligibility and your insurance premium. If inaccurate or incomplete information is provided to the insurance company, a claim could be denied. If you are unsure about your medical conditions, medications, tests or referrals, or about any changes in your medical status, you should check with your doctor to confirm the information prior to completing an insurance application or answering the insurance company’s questions.
- If you travel outside of your home Province regularly, consider purchasing an annual travel insurance plan.
Annual plans are generally more affordable than single trip plans and family rates may also be available to lower the overall cost even further. These plans also provide convenience, as purchasing multiple policies for various trips can be confusing. In addition, an annual plan can cover your trips and your family members’ trips, when you travel together and separately. You should note that annual travel insurance plans generally limit the number of days of coverage for each trip. In addition, these plans may have annual limits for certain types of coverage, such as trip cancellation and trip interruption benefits. If the policy limits are reached in a given year, separate insurance would need to be purchased in order to obtain further coverage. As with any other insurance, if you are looking to purchase an annual travel insurance plan, you should review the policy carefully and contact the insurance company or your travel insurance advisor with any questions.
If you’re looking to maximize your fun and minimize your risk, travel insurance will likely be the right option for you. Take your time, ask lots of questions, and find what works best for you and your family.
Do you have questions about travel insurance – or any other travel-related topic? Feel free to call us at 1-866-217-2677 or click here to contact us online.