Insurance. No one likes it. Who likes to put out money for the "what if", especially if the "what if" never happens. But we do it every day. Cars, houses, life.... we all have some form of insurance. However in my 15+ years of experience an a Travel Consultant, travel insurance has always been one of those things that has no grey areas. People either want it regardless of cost; or they shut it down before you've even finished asking if they have it or are in need of coverage.
Photo: Contributed
Why is travel insurance necessary?
General rule of thumb when purchasing travel products: 100% non-refundable, non-transferrable and subject-to change penalties IF changes are allowed. Now of course there are exceptions to this, which your travel agent would make you aware of. However once confirmed with payment you're most likely 'locked in' to your travel purchase.
Canada 3000 Vacations goes bankrupt, September 11/2001 terrorist attacks, the recent Lufthansa Airlines strike, the volcano in Iceland that shut down air travel to/from Europe in 2010 - all reasons WHY insurance is necessary. Time and unforeseen occurrences befall us all. And that's just for the cancellation part of it. What about emergency medical? Your tour bus crashes, you fall and break your ankle, a slip off a sidewalk lands you on your face and you've broken your front tooth; you catch the dreaded Montezuma's revenge while traveling through a hot tropical country...
How much it is?
The simple answer is based on age, length of stay, and amount of funds needing coverage. You're standard policy will run you about 10-12% of the total cost of your trip ($4000 trip, insurance will be $400, etc..). Of course again, there are many factors - especially age - as insurance premiums are based on a game of statistics. Instead of asking how much it is, first ask yourself how much are you willing to lose. If you spend $4000 on a vacation package with me, and the policy is $400; I'd rather see you spend $400 on a policy that you may not have to use than to have to cancel and be out $4000 because your purchase was non-refundable.
What does it cover?
There are a multitude of different policies with coverage from lost, stolen or damaged baggage & passport; to rental car insurance and the dreaded air flight accident insurance coverage. But here's a quick overview of the two most important:
Trip cancellation and interruption covers just those.
Emergency situations that are unforeseen and out of your control have taken place and you need to cancel, or; you need to cut your trip short and come home earlier than intended.
Some examples for cancellation: your house burns down, car accident, one of your immediate family members or travelling companion gets sick or passes away. You get sick and can't travel, jury duty, natural disaster, you are driving to the airport for that winter get-away when black ice catches you and hit the ditch causing you to miss your flight.
Some examples of interruption: the airlines goes on strike and you have no way to get home; you need to rebook on another airline and are out of pocket for extra hotel nights, food, etc., someone in your immediate family gets sick or passes away and you need to return home immediately, terrorist attack, natural disaster, your house back at home burns down.
Emergency Medical coverage is just as important.
If you're in destination and something happens how are you gong to pay for it ? This is a tricky area because many people have extended coverage through their employment, or coverage on a credit card. However you MUST check before departure how much you're covered for, if you need to call in your trip first, and if you have pre-payment assistance or you need to foot the bill and get reimbursed later. If you fall and need an x-ray on your knee, depending on the country, that x-ray on its own can cost upwards of $1500! Not to mention the fees charged to check in at the hospital, use a chair in the waiting room and have an actual doctor talk to you.
You're in destination on the golf greens of Florida when the unimaginable happens...you suffer from a heart attack. After ambulance costs, hospital bill and the cost of flying your spouse to come down and stay with you until you're recovered enough to be released and return home, you're total bill could easily be at $100,000. If that's not considered pocket change to you, then I hope you've got coverage.
As well in the fine print, the majority of emergency medical policies also include emergency dental coverage.
You're on a jet-ski off the cost of beautiful Mexico enjoying a beautiful day in the sun. You turn into a wave the wrong way and are knocked off the jet ski. On the way off you hit your face on the side panel and knock your front tooth out. Can you afford that kind of fix? Better yet, do you want to be out of pocket for that expense?
Don't forget, once you leave Canada, you CAN be refused treatment in any country at any medical facility for not having proof of funds to cover the possible expenses upon your admittance. Though that may seem shocking, it does happen and has resulted in many suffering from further complications and even sadly, their passing away.
And the conclusion?
Make sure you read the fine print. Know what you need coverage for and when you do purchase coverage, make sure it includes what you need it to. Factors like pre-existing conditions will always come into play. Medical Questionnaire's may be necessary. Call your extended work coverage providers and your credit card companies so you know what you DO have and what you DON'T. It is best to meet with a Travel Counselor that has an insurance license, or see a insurance brokerage office for questions and quotes. Shop around to make sure you're getting the best policy for you and your situation.
As an insurance licensed travel consultant, I have sadly heard many horror stories over the years that a few extra hundred dollars spent could have prevented. Before you say no, think about the risks involved. What could be prevented? What could the possible loss be - not just monetarily? And remember this TRUE example. (Names and location have been changed to protect anonymity of the persons involved).
*Mr. and Mrs. Smith came to see me. They were in their late 60s, retired, finally free of that pesky mortgage and wanted to see New York City. Both were in relatively good health with no medical conditions; and after much contemplation and discussion they decided to decline insurance coverage. Upon arrival in their much anticipated destination, Mr. Smith wasn't feeling so well; 3 days later he suffered a massive heart attack in his hotel room. Upon ambulance arrival Mrs. Smith had to present her credit card to get Mr. Smith in the ambulance and on is way to emergency. Over a course of a few hours, two local area hospitals turned away Mr. Smith and refused treatment. Finally upon arriving at the 3rd and most helpful medical center, Mr. Smith was rushed into emergency for open heart surgery. However it was sadly too late and Mr. Smith passed away. After returning home along with her husband's remains, Mrs. Smith was left with a bill of just under $200,000. At almost 70 years of age, she was in need of a job and a second mortgage on her home to cover the expense of such a tragic ordeal. The declined insurance policy for the both of them was only $700.*
This article is written by or on behalf of an outsourced columnist and does not necessarily reflect the views of Castanet.
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