As a personal finance blogger I’ll be the first one to tell you that insurance is one of those things many of us overlook, yet it’s vital to our daily lives. 

When it comes to travel, it’s no different. I joke that if you can’t afford travel insurance then you simply should not be travelling! The reality is that it’s something we really need to take seriously.

The good thing is most of us probably have some kind of free travel insurance already.

Employee Benefits

To attract top talent, employers are now offering more benefits to employees and travel insurance is just one of them.  Like any insurance policy, you’ll want to find out exactly what you’re covered for.

Here are some major things to look for:

–          For how long and for how much am I covered?
–          How quickly do I need to contact my travel insurance company when sick or injured?
–          How easy is it to contact my travel insurance company?
–          What exactly am I covered for?  (e.g., hospital stays, ambulance, prescription drugs, repatriation)
–          What are the exclusions?

Every employer offers different travel benefits, and every trip we take is unique, so what we need is to make sure we have the right coverage.

Harmonized Baggage rules canada

Purchasing additional insurance is not uncommon; it’s a downright must if your employee benefits don’t cover the length of your trips, or don’t offer enough coverage.  Check out this blog post from Canadian travel insurer, TuGo, to see what benefits you should look for in a policy.

Baggage Insurance

A couple years back, my girlfriend (now wife) planned a trip where she would spend a few days in Paris taking in the sights before joining a tour in Spain where tapas would be a daily ritual.

paris travel insurance

Less than 12 hours after saying au revoir she called me to tell me she had made it safely but her luggage did not make it on the plane—she was now in Paris with just the clothes on her back and, of course, a croissant in hand.

The airline gave her a daily allowance to cover necessities but it really wasn’t a huge amount.  Had she purchased baggage insurance it would have helped cover any additional costs up to a certain amount.

Baggage insurance doesn’t just cover delays; it also covers you if your luggage is damaged, lost or stolen.  You can even arrange for someone you trust to communicate with the insurer so you can carry on with your vacation.

Travel Credit Cards

Having a travel rewards credit card not only gives you travel perks, it also gives you travel medical insurance and sometimes more.  Every card is unique so you need to look into the details of your individual cards.

Here are a few things you need to ask:

–          Do I need to book with a specific travel agency to qualify for benefits?
–          Besides travel medical insurance, what else am I insured for?
–          Do I need to book all my travel on my credit card to qualify?
–          How long and how much am I covered for?

Travel reward cards always have a fee so if you’re not taking full advantage of your rewards it might be better to simply use a cash back card.

Travel Medical Insurance

After all these years I’m still shocked when people just assume that our provincial health plans will cover us when travelling.  Yes, we get some coverage, but it’s actually very limited and only covers certain medical services.

What does the Ontario Ministry of Health (commonly referred to as OHIP) think about getting additional coverage?

“The ministry strongly recommends that you do, whether you are absent from Canada for a few minutes or for an extended time. OHIP does not insure or pay for all out-of-country medical services. Also, the amount of funding provided by OHIP will not usually cover the full cost of any health services that you do obtain outside of Canada.”

I should note that even when travelling within Canada there are times when additional insurance might be required.  The last thing you want is to be stuck with a huge bill.

Travel medical insurance is an absolute must if you’re going to purchase just one type of insurance when travelling. TuGo has a really comprehensive travel medical insurance policy—ask for details at your local broker.

Trip Cancellation/Interruption

A few winters back I was touring the Heineken Experience in Amsterdam when I received a message saying my flight to Edinburgh (scheduled for later that night), had been cancelled due to a snow storm.  I immediately headed to the airport to figure out my options because I had a wedding to get to. Upon arrival, I was told that all flights scheduled to Edinburgh were cancelled due to the storm and the next available flight was a week away.

Edinburgh trip cancellation

People were freaking out when they heard the news, but I was calm because I had trip interruption insurance and knew any new bookings I needed to make would be covered.

I went straight to the counter of a different airline and found out that flights were still operating to Glasgow. It wasn’t Edinburgh, but at least I’d be in the right country.  The ticket cost me 600 euros, (which was about the same price as my flight to Europe) and I needed a hotel for the night since my flight was the next morning.

Eventually I made it to Edinburgh after a 6 hour snow delay on the runway, a 1.5 hour flight and a 2 hour bus ride.  What should have been a short flight became an epic 24 hour journey—and not the good kind.

The rebooked flight, the extra night in a hotel in Amsterdam, the bus ride to get me to Edinburgh, and the hotel cancellation fee for the night I missed in Edinburgh was all covered by my trip interruption policy.

Final Word

As a budget traveller, I’m always looking for the best deal, but when it comes to travel insurance I know that the lowest price may not cover all my needs. Your local broker can help go over the fine print of your policy to make sure your vacation is a blast!

Barry Choi is a budget travel and personal finance expert. You can visit his blog at moneywehave.com

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  • http://travellingboomer.com Paul (the Travelling Boomer)

    Lots of good points here. True, OHIP does cover you, but the amounts it allows for medical procedures are a fraction of what they charge in the U.S. (it may cover the costs in places like Mexico or Panama, however). I have reservations about baggage insurance, though, since your home insurance does cover your possessions no matter where they are. I once got $900 from my home insurance for a camera that went missing at the airport.

    • Jamie

      Hi Paul,

      Thanks for your comment. Agreed, a lot of Canadians don’t know that provincial healthcare will only cover a fraction of your medical bills when travelling outside of Canada. Based on the claims we process, you’d actually be surprised that health care costs in Mexico can also be expensive.

      Yes, great point! However, baggage insurance is a great option for people without home insurance, or people with limited coverage on their home insurance. It can also save the day if you lose your baggage and need to purchase items to tide you over ’til the airline tracks your bags down.

    • http://www.moneywehave.com Barry @ Moneywehave

      Hey Paul,

      Yes we’re spoiled with our health care in Canada; a lot of people assumed that we’re covered abroad which we are, but it only covers the cost of the procedure in Canada. As you pointed out overseas it usually costs MUCH MORE.

      Baggage insurance is more peace of mind, the key is to look at all your insurance policies and to decide if you need any additional coverage. Plus if you have multiple coverage you need to submit expenses in a certain order usually.

  • http://www.customcare.ca/insurance/travel-medical-insurance Robert

    Great article, it’s nice to see an article written for Canadians specifically that outlines the different types of coverage one should consider before traveling. It’s so important to get the right coverage, I just saw on the news the other day about a Canadian who went skydiving in the states and got really hurt and her insurance explicitly said it was void for skydiving, so now she has to deal with a medical bill in the hundreds of thousands of dollars.

    Using credit cards for travel insurance makes me nervous. There have been a couple times where I almost went that way and it was only after I asked some very specific questions that they finally told me it pretty much only covered me if I died or lost a limb so if you are planning on using a credit card be sure to read the fine print!

    • http://www.moneywehave.com Barry @ Moneywehave

      Hey Robert,

      Yes policies are specific so if you’re doing anything extreme then for sure you need to check if you’re still covered. Also note that some policies are pretty tight about alcohol consumption. e.g. were you drunk when you were injured.

      If you have a travel credit card the insurance package should be pretty good, but again you are right you need to read the policy.