Best Travel Insurance Canada

What is Travel Insurance and How Does It Work?

Vacations are an essential part of mental health, but they take a lot of work to organize. You need to get time off work, figure out where you are going, make a daily itinerary, make reservations, and the necessary arrangements to leave your house. But there's one crucial aspect that many Canadians neglect to organize, and that's travel insurance.

Depending on where you are traveling, forgoing travel insurance could result in catastrophic financial ruin. As Canadians, we share our border with the US, and that country is a common Canadian travel destination. But provincial health insurance plans aren’t valid in the US, so if an emergency ever did befall you, you would be on the hook for the sky-high medical bills.

On top of that, travel insurance covers a wide array of additional travel disruptions, including trip interruption and baggage loss. Whether you're planning a weekend trip or a month-long vacation, travel insurance is a must.

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What is Travel Insurance?

Travel insurance is an insurance policy that explicitly covers travel-related risks, both financial and health-related. These risks could be minor, like losing your suitcase or needing to reschedule your flight at a higher cost, or major, like emergency medical issues.

You can purchase travel insurance on a per-trip basis from a travel insurance provider. Some credit cards have travel insurance as a standard feature, and that insurance applies to all trips booked with that card.

How Does Travel Insurance Work?

When you purchase a travel insurance policy, you will pay a flat rate upfront. The policy will cover all of the specific risks mentioned above, and some insurance providers may offer different tiers with more or less insurance coverage. When you make your purchase, you must provide details about your trip, including:

  • The names, ages, and addresses of all travelers you wish to insure
  • Your travel dates
  • Your travel destination and your itinerary

When you provide that information and make your payment, you will be emailed a copy of your travel insurance policy. These documents will include directions on who to call if you need to use your travel insurance while abroad.

There are two scenarios in which you'll need to use your travel insurance: using it while on your trip and using it once you return.

If you use your travel insurance on your trip, it's likely because of an imminent emergency, such as a health emergency or baggage loss.

Alternatively, you might incur extra fees during your trip, such as rebooking a flight. In this case, you would charge those additional costs to your credit card and apply for reimbursement after your trip has concluded.

What Does Travel Insurance Cover?

Travel insurance covers a wide variety of possible risks and accidents that would are covered by the Canadian health insurance plan, including:

  • Emergency medical including hospital and medical costs
  • Ambulance and air ambulance costs
  • Outpatient services
  • Physician and lab costs
  • Prescriptions
  • Direct payment to the hospital and physician treating providing your health care
  • Coverage for a support person to be with you in the event of a medical emergency
  • Repatriation either through commercial flights or air ambulance
  • Transportation of a vehicle if you are too ill to use it as transportation home

The medical insurance offered by travel insurance policies is extensive. It covers you in case of the worst-case emergency or accident-related scenario, but travel coverage also provides a variety of other coverages, including:

  • Trip cancellation coverage for non-refundable losses
  • Trip interruption
  • Baggage loss and delay
  • Rental car damage
  • Accidental death and dismemberment

Most of this coverage usually has an upper limit (for example, baggage loss coverage may cover a maximum loss of $1,000), so it's a good idea to read your insurance policy carefully.

Also, most travel insurance health coverage has exclusions, which are certain expenses they will not cover. It's essential to read through the exclusions in your policy carefully to make sure they won't interfere with the coverage you need. Examples of exclusions include:

  • Pre-existing medical conditions
  • Medical evacuation
  • Repatriation of deceased
  • High-risk activities or out of bound activities

The last item on that list can include skiing, snowboarding, skydiving, scuba diving, white-water rafting, and mountaineering. If your trip involves any of these activities, you should double-check that your travel insurance plan provides coverage.

Different Types of Travel Insurance

Now that you know what travel insurance can cover, what do you need? There are several different types of travel insurance. These different types allow you to choose what you need and avoid unnecessary extra costs. Your options include:

  • Comprehensive Plans: Covers both travel medical plan insurance and trip interruption and cancellation insurance. Comprehensive travel insurance is the most expensive option but also gives you the most coverage.
  • Travel Medical Plans: Travel medical insurance offers you coverage for medical issues only. This type of coverage is ideal if you are planning on spending a long time abroad, such as spending winters in the US.
  • Comprehensive Plans: Covers both travel medical plan insurance and trip interruption and cancellation insurance. Comprehensive travel insurance is the most expensive option but also gives you the most coverage.

The type of insurance you'll need depends on what type of travel you are planning and your individual needs on your trip.

How to Buy Travel Insurance Plans

There are two primary ways to purchase travel insurance in Canada.

First, you can buy a travel insurance policy for a single trip from leading travel insurance providers like TD Insurance, CAA, and Blue Cross Travel. These policies can be purchased directly from the providers, or some travel booking websites allow you to buy coverage when you book your trip.

These policies' costs will depend on who is taking the trip, how long you'll be gone, and where you are going.

The cost to purchase these policies can range from under $100 to several hundred dollars depending on the variables we listed above.

Another way to buy travel insurance is to do so through a rewards credit card. Travel rewards credit cards, especially those that charge an annual fee, often come with a slew of additional perks and benefits that you access free just from having the credit card and paying the yearly fee.

One of these perks is often a comprehensive suite of travel insurance products. To qualify your trip for travel insurance under a rewards credit card, you'll need to charge at least 50%, or sometimes all, of your trip to your credit card (this requirement is usually specified in your cardholder agreement). This strategy is ideal for multi-trip insurance since you don’t have to pay out of pocket for each trip.

Our Final Thoughts

Travel insurance is an often-overlooked part of planning your trip, but it absolutely shouldn't be. While you may not experience an emergency on your trip, you'll be very grateful that you have coverage if you do. You can either buy travel insurance for each trip or use a travel rewards credit card with travel insurance to book your vacations and rest easy knowing your coverage is applied every time at no additional cost

Frequently Asked Questions

Travel insurance is not a mandatory policy to have when you travel outside of Canada. There are some exceptions to this rule. Some destinations and vacation booking organizations, for example, cruise lines, may require you to provide proof of travel insurance coverage. Most of the time, these requirements will be displayed prominently at the booking time, so as long as you read the fine print, you should not be caught unaware.

Buying a travel insurance policy insurance is just like buying any other type of insurance. It feels like it's not worth the money until suddenly an emergency happens, and it is. Since you cannot predict if or when an emergency will occur, it's better to err on the side of caution and buy travel insurance, hoping you never have it use it. If you use a travel rewards credit card, your insurance coverage is free and included with the card, making it worthwhile.

The answer is that it depends. Most travel insurance policies have specific exclusions for traveling to countries with travel advisories to avoid all non-essential travel. If you travel to a country that has a travel advisory, your coverage may be invalidated. That said, some travel insurance companies are offering specific COVID-19 friendly plans that will give you coverage even if you travel to a country with a travel advisory. These plans are understandably more expensive than a standard travel insurance policy.

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