A Primer on Buying Travel Insurance

May 30, 2018

A dream Tahiti vacation or weekend road trip does not have to be derailed by events outside of your control. Don't let the extra money deter you from making the investment of travel insurance -- the peace of mind it buys is worth every penny.

Travel experts have found that many recent global events have affected how travellers view insurance. For many Canadian travellers, insurance used to be a “nice to have” but not an essential, however that attitude is changing.

If you’re looking to purchase a package for an upcoming trip, here are some things to do before buying:

1. Read up on coverage options

The five primary types offered are vacation cancellation/interruption, medical, evacuation, baggage and flight insurance. Consider your trip, yourself and other factors when determining what kind of and how much coverage is right for you.

Cancellation insurance: This is the most common kind of coverage found in every comprehensive policy. This covers unforeseen reasons for cancellation, like illness, weather problems, carrier issues and legal obligations (like jury duty). The exact coverage varies from provider to provider. If you are pregnant and have unforeseen complications, a note will be required from your doctor.

Medical insurance: The first thing you need to ask yourself is if you need a plan that covers a pre-existing condition -- not every plan does so. Most plans cover 24-hour emergency assistance, ambulance costs, hospital services and emergency dental work.

Evacuation insurance: Within medical plans, you can also buy evacuation insurance, which allows for emergency medical evacuation to the nearest appropriate care facility if you are somewhere remote or in a place that cannot appropriately treat a condition. This is most frequently purchased by people taking adventurous trips in more far-flung destinations.

Baggage insurance: This covers travellers in two instances: It will reimburse travellers for clothes, medication and other essential items if baggage is delayed in arriving at the destination. It also covers you if your possessions are lost, stolen or damaged during the trip.

Flight insurance: Both airlines and insurance companies offer this protection solely for difficulties with your flights. Often people purchase flight insurance only for international trips because of the higher cost of fares. This can help travellers save on the fees incurred in the event of a delay or cancellation because of bad weather, mechanical breakdowns or labour strikes.

2. Read the entire policy before purchasing

This is not a time you want any surprises. Note that most insurance is sold in packages, so it’s important to comb through the inclusions in each to pick the package best tailored for you. For example, you may not need evacuation insurance in a destination like London or Shanghai because they are such huge cosmopolitan cities, but if you have many connecting flights to get to those destinations, you may want a package that includes baggage insurance. Think through the practicalities of each trip and make a list of what you think would most likely need to be covered. Before pulling out your credit card, see what coverage you already have.

Select insurance companies cover people if their medical conditions are under control and stable for a certain period (three to six months) before travel. As a caveat to all of this, be advised that a minor change in someone’s prescription or medication can mean that the medical condition is not considered  “stable.”

When the Zika virus first made headlines last year, many travellers learned the hard way that standard travel insurance policies often do not cover cancelling a trip when a traveller is at heightened risk from an outbreak. If a member of your group is a child, a senior citizen or a woman who may be pregnant, do not purchase any insurance until you know what is and is not covered in the case of infectious diseases.

3. Compare prices online

Top sites that compile information and policies include Kanetix, Travel Guard and InsuranceHotline.com. It's not advised to purchase from smaller, no-name vendors.

4. Talk!

Ask around to see if friends or family members have had a good experience with a specific provider. It never hurts to check out travel forums for other perspectives and recommendations as well. When online, look for people who have taken a similar type of trip — but remember they likely have completely different circumstances than you do.

5. Weigh the pros and cons of getting insurance through a tour provider

Many travel companies will offer discounts with packages booked, but that doesn't ensure that what is being provided is the right kind of insurance for you. For instance, it’s common practice for some packagers to provide more coverage than you need or not enough. Oftentimes what travellers need is a combination of a few things, and it can be harder to customize coverage this way.

6. Purchase your coverage as soon as possible after booking a trip

It’s smart to buy your insurance policy within a week of the date you make the first payment on your trip. Policies purchased later than a designated cutoff date — generally seven to 21 days, as determined by the insurance company — are less likely to cover tour company or air carrier bankruptcies, pre-existing medical conditions (yours or those of family members at home), or terrorist incidents. Mental health concerns are generally not covered.

7. Immediately create paper copies and digital versions of your documentation

From itineraries to coverage policies, it’s wise to save versions of all your travel documents in a safe place online. This way they can be accessed and forwarded while away.

Whenever in doubt about how to proceed when travelling abroad, consult the Government of Canada’s travel insurance fact sheet.


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