Travel insurance: Do you really need it?

Author: Canadian Living


Travel insurance: Do you really need it?

Michelle Hudema knows all too well that it's the little things that can ruin a vacation. During a vacation in Belize, the trip leader at Gap Adventures ( headed out for dinner one night. "I took a chance and left my camera in the room," says Hudema. When she returned, it was gone. Fortunately, her travel insurance covered baggage – her insurer even helped her pay for a new camera. Here are a few questions to ask yourself before you leave for vacation.

What you need
Travel insurance breaks down into three categories: medical, cancellation and baggage. You definitely need medical coverage. Cancellation and interruption insurance may be pricier and is probably the insurance you've opted to skip in the past, but remember, it covers you in the event of an earthquake, for example, or an evacuation. Don't worry about baggage insurance. It's often rolled in as part of an overall travel plan.

Read the fine print
Most credit cards and even some employee benefit plans include out-of-province coverage. But some cards impose limits or have age and eligibility requirements (many cards exclude coverage for pre-existing conditions, and some employer benefits only apply to the employee and not the whole family). "Check your coverage against what's being offered elsewhere and make sure that you cover any gap," says Tim Bzowey, vice-president of the travel division at RBC Insurance. Is there always a gap? "No. Some coverage on higher-end cards is quite good."

Who picks up the tab?

As Canadians, we're not used to pulling out our credit cards in an emergency room. Look to see if your insurer will negotiate payment on your behalf in the event of a hospital visit. Hospital bills can range into the thousands. Take a look at your existing medical coverage – if it mentions anything about reimbursement (meaning you'll have to pay up front), it may be worth looking for added coverage elsewhere. And think about a deductible. "It can bring the cost of coverage down," says Bzowey. This is particularly true if you have a pre-existing medical condition or you're planning on being out of the country for an extended period.

Frequent travellers

Are you really going to buy insurance for a few hours of cross-border shopping? Probably not. But an annual travel insurance plan will have you covered, no matter how short-notice the trip. "All you have to do is gas and go," Bzowey says, adding that the majority of travel insurance in Europe is purchased in this way – North Americans are just getting used to the idea.

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This story was originally titled "Safe Travels" in the July 2010 issue.

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Travel insurance: Do you really need it?