So you’re going on a cruise! Passport? Check. Bathing suit? Check. Clothes, shoes, toiletries, all your gadgets and chargers? All yes. But believe it or not, more than 50 percent of Canadians don’t pack this on their vacation....Travel Insurance.
Cruise lines charge a penalty for cancellation within 90-75 days prior to sailing. The penalties can reach up to 100 percent of the total trip depending on how close you cancel. Flights, unless in business class, are non-refundable once booked. Furthermore, should anything happen during the trip that requires medical attention or causes interruption, there are high costs associated.
Yet, here are the reasons why travellers don’t buy insurance:
- It’s too much money
- It's a waste of money
- They have coverage through employment benefits or credit card policies
Travellers who decline insurance because they feel it's too expensive, or think “I’m not going to cancel”, or “nothing ever happens to me” are taking a HUGE gamble on their hard earned vacation dollars. I’ve had cousins whose 6 year old fell and broke her arm 2 days before their trip, friends with a baby who got an ear infection and couldn’t fly, and a sister-in-law who tripped down 3 steps on her way to her garage, breaking her ankle. Did they plan to cancel when they booked their trips? You bet they didn’t! Life happens, and you just never know what it can throw at you.
While it’s true that nothing ever happens to most of us, if we’ve shelled out a few hundred dollars more for insurance and didn’t use it, we somehow feel cheated. Well, here are samples of medical bills incurred by travellers while abroad, according to claims processed by Allianz Global Assistance:
- A broken ankle requiring surgery in Florida: US$45,000
- In Mexico, a broken arm requiring surgery and a two-day hospital stay: US$32,800
- A hip fracture in the Dominican Republic: US$43,500
I am confident to say that not too many people have this kind of money kicking around. I'd rather spend a few hundred and not use it, if it spares me from these crazy expenses.
For those who have insurance coverage through work, please triple check the policy and pay special attention to exclusions, and maximum payouts - especially what is considered “reasonable” amounts. I went on vacation with a friend who tripped and split his arm open. The bill to stitch him up was US$1,800. It was $900 just to see the ER doctor, and he was charged for every bandaid, pain pill and ointment. When he came home and put the claim through his work, the insurance company only reimbursed him $900, because they stated that was the “reasonable” amount for such treatment in that part of the world. I was shocked to learn that.
Lastly, many premium credit cards provide travel insurance coverage if the trip is purchased with the card. Some of them do offer great coverage and high payouts, however, please still triple check the policy to make sure it provides sufficient coverage for the time that you are away. If there is a gap, top it up with extra insurance. How much is enough? It is recommended to have at least one million dollars of out of country medical coverage per person, and make sure you are covered for every day you are out of province, including the day of departure and return.
Purchasing travel insurance has great benefits. First of all there is a toll-free or collect number to call 24/7 for assistance, and a claim can be started immediately. In many parts of the world, before a patient is even admitted, proof of insurance needs to be shown. The insurance company will co-ordinate with the medical practitioners to look after the traveller and where possible, pay the fees upfront. Since we know that these fees can range in the tens of thousands, having insurance is a huge peace of mind.
Other benefits of travel insurance include flight accident, baggage loss or delay, subsistence allowance, bringing in a bedside companion, returning of children home, repatriation and more. The cost of insurance is usually around fifteen or twenty percent of the cost of the trip. Think about it, if you paid $2,000 for your vacation, isn’t it work another $300 to protect yourself, vs having to pay $40,000 for a hospital stay should something happen?
The purpose of this post isn't meant to scare you, and I do not reap any benefits from any insurance company by recommending travel insurance. I simply want to educate my readers on the importance of travel insurance. While researching for this post, I found this article from the Financial Post with stats about out of country medical costs. It was written in 2013 - and those numbers are scary... so imagine what it would cost today!! Please, talk to your travel professional and add insurance to your packing list.