Understanding Your Insurance Coverage Before Travelling

As the temperature keeps everyone indoors, many Canadian travellers decide to fly south. However, many don’t know enough about what their insurance covers when abroad.

Travellers often opt for travel insurance (which is recommended), protecting against any accidental injuries or illness. This can cover: hospital visits, emergency surgery and physicians. However, every policy is different and there’s a lot of confusion over what is actually covered.

Recently, there was a lot of press around the “million-dollar-baby”. A dream vacation turned into a financial nightmare after a Saskatchewan mother required an early emergency delivery of her daughter in Hawaii. After the additional subsequent recovery care, the couple was saddled with almost $1 million in medical bills.

While the couple purchased medical insurance, the insurer allegedly declined to pay the claim due to a pre-existing medical condition, despite the physician reportedly saying that the condition was unrelated.

While an insurance claim like this is uncommon it does highlight the importance of understanding your health insurance policy. Travellers should be aware of the resources at their disposal to assist in the disputes process.

In addition to private health care coverage, many Ontario residents are unaware of what their health-care plan (OHIP) will cover when abroad. In general, not much. OHIP, for example, pays just 7 to 9% of a hospitalization abroad, to a maximum of $400 a day. More information on OHIP coverage can be found here.

Despite the “million-dollar-baby” case, approximately 95% of the 103 thousand claims each year are paid by Canadian insurers. However, for those denied, there is help available outside of the legal system. The OmbudService for Life & Health Insurance (OLHI) is a not-for-profit group that provides completely independent dispute resolution services between consumers and insurers.

Will McAleer, VP of the Travel Health Insurance Association of Canada (THIA), reports “40 per cent of Canadians travelling abroad don’t understand the coverage they have purchased.” He further adds “young voyagers may be more at risk, since older travellers – particularly snowbirds on longer journeys – tend to be well-educated.”

Many travellers use insurance coverage provided by their employer or credit card company. To decide whether supplemental coverage is required depends on your situation. It’s recommended to talk to your employer about what your plan covers or discussing with your credit card company on what is and isn’t covered.  Some key questions to ask are (provided by RSAtravelinsurance.com):

1. Does the trip have to be put on your credit card for eligible coverage?
2. Does the policy provide return emergency travel?
3. Does your policy cover the length of the trip? Can you extend the policy at an additional charge?
4. Does your insurance company provide you with emergency assistance contact info, including a toll-free telephone number?
5. Are there exclusions that pertain to specific activities/events?
6. What maximums, deductibles and/or co-insurance would apply in the event of a claim?
7. Is the country you’re travelling to covered in your policy?
8. If you have out-of-country coverage through your group plan, are there any restrictions? Does it cover you for business travel only?
9. Does the policy deny benefits if your medical emergency arises because of a pre-existing condition?
10. Does the policy cover your family or anyone travelling with you? Do all people covered have the same level of coverage?
11. Are the benefit maximums high enough to provide the protection you may need?
12. Does the provide pay any bills directly or reimburse you afterwards? In the event of a $30k hospital bill, this could get costly.

These are only a few of the questions you should be asking, but provide a solid background in what is and is not covered.

Being knowledgeable on the facts will save both time and money dealing with the insurance companies. Make sure to be prepared before going away. Safe travels!