The basics of travel insurance are often overlooked. Some people don’t understand what travel insurance covers while some don’t bother with it at all. This is a huge mistake. Canadians might be used to free healthcare, but the cost of the same attention in other parts of the world could cost you a small fortune.
We spend hours searching for cheap flights and even more time researching our trips, yet many people don’t even think about their travel insurance needs. Travelling without insurance is a huge risk that’s just not worth taking. I’ll explain everything you need to know about travel insurance and how you might already be covered.
The basics of travel insurance
Travel Medical – Travel medical insurance is an absolute must–have when travelling since it covers the basics such as a visit to the doctor or hospital. It also covers emergency services such as ambulance rides and emergency evacuations.
Trip Cancellation/Interruption – Unfortunately, sometimes things happen that leave us with no choice but to cancel our travel plans. Assuming it’s for a qualifying reason, trip cancellation/interruption will reimburse your travel costs.
Baggage Insurance – Baggage insurance is often overlooked, but you’ll be glad you have it if yours is ever delayed, lost, or stolen. Every policy is different, but basically if your luggage is delayed for a certain amount of time, you’ll qualify for a set amount of money which you can use to make purchases.
Accidental Death & Dismemberment – AD&D gives you (or your next of kin) a set amount if you lose one of your limbs or pass away while travelling. Obviously, this is something you would prefer not to make a claim on.
Multi-trip Insurance – Instead of buying travel insurance every time you travel, you can just buy an annual multi-trip insurance plan. The cost is about the same as buying two 14-day insurance plans, so if you travel a lot, it could be of good value.
Note that with any kind of insurance, you need to read the policy to find out exactly what you have covered. Every plan is different, and not everything is included, so don’t just assume you’re getting what you need.
Evaluating your needs
At the very least, you need to have travel medical insurance whenever you travel. The cost of medicare abroad is absolutely insane. A quick trip to the doctor in the U.S. could cost you hundreds of dollars, while an overnight stay at the hospital could cost you thousands. Travel insurance seems like a deal when you consider your health and what it could potentially save you.
Basically, if you ever leave your home province, travel insurance is a must. Your provincial healthcare will cover you for some basic medical attention, but only up to the amount that’s approved in your home province. It won’t cover any emergency services, so if you need a helicopter medical evacuation, you’re out of luck.
Don’t forget to have it even if you’re going to the U.S. for a weekend trip or a day trip for shopping. Again, medical attention is expensive whereas travel insurance will only cost you a few dollars (for weekend trips).
Trip Cancellation/Interruption is technically optional, but it’s something I prefer to have. With most policies, if you’re delayed for 4 hours, you’ll be entitled to a hotel and possibly some spending money. As weird as it sounds, insurance companies are a lot easier to deal with than airlines when there are delays, so I prefer to have the peace of mind.
Baggage insurance is another optional insurance that is often hotly debated. Technically speaking, your home insurance covers any valuables that are damaged or lost in your luggage, but that doesn’t help you in the moment. I personally like having baggage insurance since it’s pretty cheap, but I can see why some people would not bother with it.
You might already have travel insurance
The great thing about travel insurance is the fact that you might already have a policy. If you have benefits through your employer, take a look to see if you have travel medical insurance included. Most major employers will have travel medical insurance as a standard policy, but it’s rare that they’ll offer trip cancellation/interruption or baggage insurance.
Travel credit cards tend to have excellent coverage and will usually include travel medical insurance, trip cancellation/interruption, baggage insurance, and accidental death & dismemberment. To qualify, you need to book your flights on the credit card that has the insurance benefit. Keep in mind that credit card travel insurance usually only covers a set period of time e.g. 10 or 14 days. If you’re travelling longer, you’ll need to extend your coverage or purchase a separate policy.
Making a claim
Every insurer has different requirements when making a claim, so do read the details of your policy to figure out the proper steps. Generally speaking though, you should do the following:
Travel medical insurance
- Call your insurance provider as soon as possible, preferably before any procedure is done (this may not be possible)
- Get any documentation possible e.g. medical records, procedures done, receipts
- If your insurance provider didn’t make the payments directly, submit your receipts as soon as possible
- Contact your insurance provider and provide evidence that your reason for cancelling your trip falls under your policy details
Trip interruption / baggage insurance
- Contact your insurance provider
- Get documentation from your airline about the delay or lost luggage
- Make your purchases and save all your receipts
- Submit receipts as soon as you can
The basics of travel insurance are pretty straight forward once you understand how it works. Look at your employee benefits and credit card benefits first before buying a policy. If you still require coverage, speak to an insurance broker instead of buying it directly from a travel agent or tour operator. Travel insurance is a must; never travel without it.
Check out other parts of the series below
Part 1: Budgeting for a trip
Part 2: How to pick a vacation destination
Part 3: How to find cheap flights
Part 4: How to save money on hotels
Part 5: How to eat cheap when travelling
Part 6: The best way to exchange money
Part 7: The basics of travel insurance
Part 8: Sticking to your travel budget