Disappointment Lurks if You Buy the Wrong Travel Insurance

When a resident of Niagara Falls, Canada, planned to join a church group from the American side of the Falls on a trip to Israel and the Middle East, she decided to buy the same travel insurance as others in her group.

She just happened to mention to a local travel insurance broker that she had purchased the US policy. It was a good thing she did, reports insurance agent John Wilson. Even in an age of global travel, it’s dangerous to assume you can buy just any travel insurance policy and expect it to suit you.


Her tour group’s plan only covered Americans

“She sent me an e-mail copy of the policy [and the] first thing I looked for was … if they DID cover non-US residents. Turned out it [DID NOT], so I fixed her up with a [Canadian out-of-country medical] plan.”

Outright exclusion of Canadians is not the only potential pitfall with policies designed for residents of other countries, such as the policies marketed by cruise lines. Some of these policies do not come into force until the purchaser steps on board, notes Robin Ingle, Chairman of Ingle International.

Related: Going Cruising? Be Prepared if the Seas Get Rough

That may be fine for an American traveller with either year-round private insurance within the US, or government-sponsored Medicare coverage. But it could leave Canadian travellers in trouble should they become ill or injured while travelling from home to the US port.

Frequent cruise passengers have posted warnings about travel insurance sold by cruise lines on the website Cruise Critic. One of the harshest commentators is a woman from Oregon dubbed nana541. She warns never to buy it.

More than the ships have portholes

Trip cancellation coverage sold by cruise lines may not cover flights and other non-refundable travel expenses, she warns. It may only cover the cost of the cruise. Some plans have stricter exclusions for pre-existing medical conditions than certain travellers might expect, she adds. (Ingle notes that some such plans may have as low as a $15,000 coverage limit for pre-existing medical conditions—not nearly enough to pay for a few days in the hospital.) Meanwhile, the plans may not cover the cost of an air ambulance to transport the passenger home, or for the potential loss if a cruise line becomes bankrupt, notes the Oregon cruise critic.

Related: Medical Repatriation to Canada? Not So Fast

Marketing claims on websites could also mislead some consumers. One gentleman who sent a plea for help to this writer was under the impression that he and his wife would be eligible for reimbursement after having a ‘bad experience’ in Panama. So while their trip wasn’t unexpectedly cancelled, it certainly wasn’t enjoyable. But unfortunately, no coverage exists for trips that don’t meet your expectations.

The Worry Free Vacation Security Plan they had bought from Sunwing Vacations, a national marketer of all-inclusive travel packages, offers trip cancellation insurance. But disappointments aren’t included in the policy wording. You must deal directly with the seller of the travel service regarding a trip that disappoints.

Their money-back offer had a time limit

Sunwing’s use of the terms “worry-free” and “unique” may have contributed to the man’s unrealistic expectation. But the coverage Sunwing does offer could have led to disappointment for another reason.

Most trip cancellation plans will pay cash to policyholders who must cancel a trip due to one of the many disruptive life events listed in each policy. Sunwing’s plan differs from the rest, however. It provides travel vouchers—for between $250 to 100 per cent of the cost of the trip—depending on when the traveller cancels the trip.

Related: Ask Questions About Trip Cancellation Insurance

The value of Sunwing’s refund is further diminished by a requirement that the vouchers be used within a year. So the vouchers may not be worry-free, as promised, if you could not travel within that time period.

Complaining is easier close to home

Never assume that all travel insurance policies are alike, or are sufficient for your needs. The surest way for Canadians to find a policy to suit their needs is to deal with a licensed and knowledgeable broker. An expert who sells a selection of different plans can help find a policy with the right options, such as supplier default or bankruptcy protection if you deal with a travel supplier that does not contribute to a travel industry consumer protection fund in your home province.

A major advantage of dealing with an insurer and broker licensed to sell in Canada is that you will find it far easier to resolve a dispute here than in a foreign country. A Canadian broker can also help find international traveller insurance licensed in the foreign country if you plan to stay for an extended time period.

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