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Should You Buy Travel Insurance And Is It Worth It?

Travel insurance makes sense if you want to protect the amount of money you’ve laid out for your vacation. Without it, you’re also taking a big gamble if you get sick or injured while you’re away because provincial health plans don’t offer the same coverage outside of Canada. But you might be hesitant to add yet another expense to your travel budget after paying for airfare, hotels and activities. Still, if you can’t afford to lose that money if something unexpected happens, or shell out thousands of dollars (or more) if you get sick or injured, travel insurance can be a smart investment.

Here are some scenarios where travel insurance can pay off.

What Travel Insurance Covers

Travel insurance companies typically offer three different levels of coverage: Emergency medical, trip protection and a comprehensive or inclusive plan that combines both.

Emergency Medical Travel Insurance

Emergency medical travel insurance protects you if you get sick or injured during your trip. Without medical insurance, you could be stuck paying out hundreds of thousands of dollars. This coverage includes:

Travel Medical Insurance For Emergencies

Whether you’re canoeing in Argentina or taking a safari trip in Zambia, a medical emergency can certainly put a big dent in your travel mojo. It also can put a big dent in your budget.

Most provincial health plans offer little to no coverage outside the country. That means you have to pay for your medical care if you get injured or become ill during your trip—and if you think it’s not likely, or that it’s not a big deal, think again.

Snowbird Advisor Insurance shares the example of a 78-year-old man who was admitted to a Florida hospital with chest pain. He was diagnosed with three severe heart blockages that required surgery. His medical claim: $312,714.97. Then there’s the woman in Florida who was treated for food poisoning at a cost of $5,699.68. And finally, a 77-year-old Canadian woman in Mexico who fell down the stairs and needed surgery for a fractured knee. Without medical insurance, she would have been out $79,687.56.

Travel medical insurance covers costs for doctor and hospital bills, ambulance service, medicine, X-rays and lab work, up to the limits in your policy. Common policy limits are $5 million and $10 million.

Medical Evacuation Travel Insurance

Imagine needing to be airlifted off a mountainside in Switzerland after a hiking mishap, or requiring a flight off of a cruise in Jamaica after suffering a stroke.

It can cost an estimated $15,000 USD to $200,000 USD to be transported by helicopter or ambulance to a nearby health care facility for treatment of an injury or illness somewhere in the world, according to Allianz Travel Insurance. That does not include the cost of the treatment itself.

Medical evacuation travel insurance covers the expense of being taken to the closest health care facility overseas that’s equipped to treat you, and it also may pay for you to be flown back home if you need advanced medical attention. Along with medical evacuation, this coverage pays for repatriation, or transfer, of a traveller’s remains to Canada.

This coverage may be included as part of your emergency medical insurance or there may be a separate limit under your policy. For example, World Nomads offers $500,000 coverage for medical evacuation and repatriation.

It’s important to note that some tour operators and cruises require this coverage. For example, travellers booked with Adventure Canada require a minimum of $500,000 USD coverage per person.

Emergency Dental and Other Medical Coverage

Your medical insurance may also offer coverage for emergency dental. For example, Blue Cross offers up to $2,000 for a dental accident (say a broken jaw) and up to $500 for dental treatment, like if you suffer an infected tooth.  Most plans will also offer coverage for other professional services, such as a physiotherapist, chiropodist or osteopath. Limits will vary; for example, Blue Cross offers up to $400 per profession while BMO Travel Insurance offers up to $150 per discipline.

Trip Protection Travel Insurance

Trip protection insurance compensates you for trip costs due to unforeseen events before and during your trip. This may include:

Trip Cancellation Travel Insurance

Before you’re even able to finish packing your sunscreen and swimsuits, an unforeseen circumstance could force cancellation of your trip—for instance, if a tour operator goes out of business, you become ill or a family member dies. Travel insurance that includes trip cancellation coverage will reimburse the pre-paid, non-refundable costs of your trip in these kinds of situations.

“Cancel For Any Reason” Travel Insurance

Note that you can make a claim using trip cancellation coverage only if your reason for canceling is listed in the policy as an acceptable reason, such as your travel visa didn’t arrive in time or your business meeting was cancelled. To broaden cancellation coverage, some insurers offer an add-on known as “Cancel For Any Reason” travel insurance (CFAR).

CFAR coverage lets you cancel a trip for any reason and receive partial reimbursement. Each plan has its own rules and reimbursement rates. For example, if you have CFAR coverage with your CAA Trip Cancellation and Insurance Plan, you can cancel up to three hours before departure and receive 50% reimbursement. The cost of CFAR coverage will up your insurance premium significantly.

Trip Interruption Insurance

While trip cancellation insurance provides coverage before you departure, trip interruption insurance kicks in once you’re already on your trip and you have to return home sooner or later than planned. This coverage reimburses you for non-refundable and non-transferable portions of your unused and prepaid travel arrangements up to the sums insured. Each policy provider will stipulate what reasons are covered if you have to end your trip suddenly, such as a family member develops an unexpected medical emergency or a natural disaster hits your home. Trip interruption insurance also covers travel delays due to transportation issues, such as a missed connection due to a plane’s mechanical issue.

Travel Delay Insurance

Travel delays are a headache for many travellers. A policy with travel delay insurance can reimburse restaurant and hotel expenses when a flight is delayed due to a reason listed in your policy, for instance bad weather or a mechanical problem. The daily amount of coverage usually ranges from $150 to $250.

Baggage Insurance

If your luggage is lost, stolen or damaged during a trip, a travel insurance policy with baggage insurance can reimburse you.

Baggage insurance also extends to your personal possessions, so if your backpack gets stolen, you can file a claim. Be aware that baggage insurance compensates you for the depreciated value of your belongings and not the amount to replace your stuff with new items. Also, there are exclusions and caps on certain items.

In addition, some travel insurance plans cover baggage delays. This coverage can pay for items you need to buy, such as clothing and toiletries, to tide you over while you’re waiting for your luggage to catch up with you. Note that baggage delay benefits come with a specified waiting time before benefits apply.

For example, Manulife Travel Insurance offers up to $500 for necessary toiletries when your luggage is delayed by 10 or more hours and up to $300 for any item, or set of items, to a maximum of $1,000 per trip.

Your insurer may also offer coverage if your travel documents get lost or stolen. For example, the Explorer plan with World Nomads will cover up to $1,000 in replacement costs if your passport, driver’s licence, birth certificate or travel visa is stolen or lost during your trip.

All in all, travel insurance is a small cost relative to the trip costs you can protect—especially when traveling uncertainties and surprises abound.

What Does Travel Insurance Not Cover?

Travel insurance generally doesn’t cover losses due to reasons and circumstances that are within your control. It’s designed to safeguard your trip investment if unexpected circumstances derail your plans.

For instance, trip cancellation benefits only apply if you cancel due to reasons listed in your policy. That means you won’t be eligible to file a standard trip cancellation insurance claim if you simply change your mind about going on your trip. For that, you would need CFAR coverage.

You should review the fine print of your travel insurance policy and familiarize yourself with what your policy doesn’t cover because all travel insurance plans have exclusions.

For example, medical claims exclusions often include things like:

  • Elective procedures
  • Mental health care
  • Participation in adventure or extreme activities.
  • Physical therapy
  • Routine physicals and routine dental exams.
  • Routine pregnancy

Also be aware that travel insurance policies generally won’t cover your losses for a hurricane unless you purchase travel insurance before the storm is named.

When is Travel Insurance Worth It?

Generally, travel insurance is worth considering if:

  • Your trip cost is much more than you can afford to lose.
  • You are travelling internationally.
  • You are travelling to a remote area with limited nearby health care facilities.
  • You are travelling to a hurricane-prone country.
  • You have lots of pre-paid, non-refundable tours, day trips and activities planned.
  • Your trip involves connecting flights or multiple destinations.
  • You want to be partially reimbursed if you decide to cancel your trip or return home early for any reason.

When Is Travel Insurance Not Necessary?

You generally don’t need trip protection travel insurance if you’re not putting down large non-refundable trip deposits or if you’re travelling within Canada.

For example, travel insurance may not be necessary if you’re taking a cheap, domestic trip. If you’re going on a long-weekend getaway and staying with friends with plans to see a show and do some shopping, you likely won’t have a lot of pre-paid, non-refundable expenses. And your provincial health insurance can likely cover medical costs if you get sick or injured during your trip. (However, not all medical expenses are covered. For example, if you need an ambulance, you’ll be on the hook for that cost.) In that case travel insurance may not be needed.

You also may not need travel insurance if your credit card benefits provide travel insurance coverage. It’s wise to check with your credit card company before planning a trip so you’re aware of any applicable travel coverage.

Should You Buy Travel Insurance FAQ

When is the best time to buy travel insurance?

The best time to buy travel insurance is once you’ve made all your bookings, such as your flight, hotel and any excursions. Then if you’re purchasing travel insurance with trip cancellation and interruption coverage, your entire travel investment is covered.

If you or your travelling companion has a pre-existing medical condition, there may be exclusions based on when you buy your coverage. For example, if you’re 54 years old or under, Blue Cross will not pay out for a heart condition if you’ve used nitroglycerine for chest pain more than once in a seven-day period during the three months before the effective date of insurance. For ages 55 to 75, the same condition is applied for a six-month period.

What if my health changes after buying travel insurance?

Say you’re taking medication for a heart condition and the dosage changes after you buy travel insurance. If you don’t inform your insurer of the change in dose and you have to make a claim because you’re hospitalized with chest pain when you’re on your trip, your insurer could deny your claim. It’s critical to disclose any underlying medical conditions before you leave on your trip.

I want to go bungee jumping on my trip. Will my travel insurance cover that?

Activities that are considered high risk, including hang gliding, skydiving, bungee jumping, backcountry skiing,  rock climbing, mountain climbing and canyoning, may not be covered by your travel insurance company. Each company has its own list of exclusions, so it’s important to know what is and is not covered. Some insurance companies, such as CAA Travel Insurance, offers a rider for extreme sports, while others, such as World Nomads that covers more than 150 activities, sports and experiences, are specifically geared towards adventure seekers.

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