The 10 worst mistakes when buying travel insurance
Written by Alex Bittner, CanAm Insurance Group
Do you participate in sports when you travel? All policies have exclusions and limitations on coverage for athletic activities. Some policies will exclude coverage for things like scuba diving, bodily contact sports, race or speed contests, even for amateurs! However there are some policies that will cover amateur athletics at the same price. The mistake? Buying a plan that does not cover your athletic endeavor when you need it!
Are you covered for your pre-existing medical conditions? How do insurance policies handle coverage for pre-existing medical conditions? First of all, no two policies are the same. Generally speaking though, the insurer is looking at medical stability with respect to a medical condition when determining risk. Medical stability meaning no hospitalization, no treatment or medical investigation, and no change in medication for a specified length of time (for example 180 days)! Generally, the longer you are stable, the less expensive the policy. The mistake? Don't assume that your pre-existing conditions are covered!
Annual plans. Frequent travellers should purchase an annual plan. Pay an annual premium and get covered for as many trips as you want to take during the year. Travellers usually opt for a 30 annual plan, and this provides travel insurance for all trips – business, cross border shopping, interprovincial travel, and vacations during the course of the year up to 30 days at a time. Should you need to travel longer than 30 days on occasion, the plan can be topped up. These annual plans are very economical. The fine print? We have just explained the stability requirement in the last point, and it applies to the annual plan as well. The mistake? Frequent travellers don't realize that a recent change in medication or change in their medical pre-existing condition could compromise their coverage for their next trip; they need to be medically stable before each trip!
Reimbursement or up-front payment plan? Imagine this scenario … you break a leg on your trip, get rushed to the hospital only to find out that the travel insurance plan that you have purchased is a reimbursement plan! That means that you have to dig out your wallet for your credit cards and pay for the hospital bills yourself, and then submit your claim to the insurance company when you return to Canada! Well, you have purchased the wrong plan. The mistake is that you have purchased a plan that you assumed would take care of the financial hit up front!
Call the hotline if you are hurt or sick! Insurers today insist that you call the 24 hour emergency assistance toll free hot line that they have provided for you, usually on a wallet card. Why? The managed care process starts the moment the hot line is called. The medical professionals answering the hotline will liaise with the attending physicians to determine the best and appropriate care while mitigating instances of misuse and duplication of medical services. The mistake? Not calling the hotline and being responsible for up to 30% of the bill as per the fine print in the policies!
Covered on your credit card? Most credit card companies have replaced 'emergency travel medical insurance' with 'Travel Accident' insurance. This is a much different product and doesn't offer the full protection you need when travelling. Similar to AD&D, Travel Accident coverage provides a predetermined lump sum in the event of a specific injury or death as a result of an accident ONLY while travelling. Travel medical insurance should cover hospital, emergency prescription drugs and other expenses. In addition, cards do have age limitations, pre-existing condition stability exclusions, sports exclusions, etc. The mistake? Relying on your credit card for travel health insurance!
Worldwide coverage. Again, not all policies are the same. Let me point out that American companies won't cover travel to Cuba. The mistake? Not buying a plan from a Canadian insurer!
Your provincial government plan is enough. In the province of Ontario, OHIP does contribute to your out of province medical bill. But, it is clearly not adequate. As a percentage, OHIP pays roughly 9% of the bill if you are hospitalized outside of the country. In actual dollars, OHIP pays a maximum of $400 a day towards your in-patient hospital bill, and in addition they pay the doctor the equivalent fees as if it had occurred in Ontario. The mistake? Believing that OHIP covers you if something should happen while you are out of town!
The best price often comes at a cost. We are all consumers looking for the best value. The same applies to our travel insurance policy. Tell the truth – full medical disclosure – and get responsible coverage. What good is a policy that will not cover your broken arm if you get body checked on the ice in Buffalo? Or, what good is a policy that will not cover the costs for a heart attack in France? The mistake? Buying a policy on price and not coverage.
Your insurance professional. They are the key – they are there to assist you with the purchase (they can get everything in writing if you're not sure) as well as assist you in the event of a claim. Let your insurance professional be your advocate! The mistake? Buying the wrong plan based on an ill advised recommendations.
The Insurance Advisors @ Guthrie Insurance Brokers Ltd
Toronto – (416) 487-5200 Richmond Hill – (905) 313-8481