Travel insurance only covers what is specifically listed in your policy. The  list of valid reasons you may cancel  and claim are usually found in the “what’s covered”  or under the “benefits section” of your insurance policy. If the reason you cancel you trip is not spelled out exactly in your trip cancellation policy, chances are you will not be covered. Even if the reason your cancelling your trip is a covered benefit, there may be conditions and other exclusions which will limit coverage or cause your claim to be denied.

Too often travellers are under the misconception that just because they have purchased a trip cancellation insurance everything will be covered. This is simply not the case. A couple who cancelled their cruise found out the hard way that travel insurance only covers a narrowly defined set of circumstances.

The couple decided to cancel their cruise after a devastating earthquake struck Chile on Feb. 27, just a few days before their departure. At the same time the US State Department issued a Travel Advisory to avoid non-essential to Chile. According to a source quoted by Elliott, the insurance company denied the claim because the the travel advisory was limited to the Santiago region.

Since the hotel was open and accepting guests during the time of the couples  stay, the insurance claim was denied. In order for the claim to be covered under the policy the hotel would have had to be completely uninhabitable which was not the case. Canceling a trip due due to fear of traveling or other concerns not specified in the policy will not be covered under your trip cancellation insurance. Some travel insurance policies include a special benefit for cancellation for “any reason”. However typically if you claim under the “any reason” benefit these policies will only reimburse a percentage of your trip cost. This means that you would not be entitled to a full refund and your claim usually will be limited to 50% of total trip cost.

As a result the couple lost their entire cruise investment of $7,100. A costly mistake which could have been avoided if they had carefully read their travel insurance policy or contacted the claim department prior to cancelling their cruise holiday. Also, it is really important to contact the insurance company directly and not rely on the advice given by your travel agent or booking agent.

In this example the the unfortunate couple may have reacted too quickly and jumped the gun by cancelling their cruise before getting all of the facts or seeking guidance from their insurance company. If they had called their travel insurance company prior to cancelling they would have been advised that they did not have a valid reason for cancelling the cruise. No doubt, they may have decided to travel knowing it would have cost them $7,100 to cancel the trip.

Usually when a claim is denied the “fine print of the policy” is blamed. The reality is that although travel insurance provides valuable benefits it does not cover every possible eventuality that might cause you to cancel your trip. The best advice is to read your policy carefully before deciding to cancel or contact the insurance company to make certain your cause of cancellation is a covered benefit of your trip cancellation insurance.

Always Travel Safe & Secure – GOinsured!

According to Milan Korcok, Editor of the TravelInsuranceFile travelers too often think their doctor’s “opinion” about their health is all it takes to qualify them for coverage or reverse a claim denial their insurer concludes was due to a pre-existing condition.  And mostly, they are wrong. When seeking coverage, applicants have to play by the insurers’ rules.

Always Travel Safe & Secure – GOinsured

For most people, travel insurance is a necessary cost of travelling and readily pay the premium which is a small fraction of the total cost of the trip. So why are so many people still travelling without adequate travel medical  insurance? Is it because of cost?  What is the problem?

Travel Insurance is easy to buy, is relatively cheap when you average the cost out on a daily basis and will protect you from financial ruin in the event of a catastrophic claim. In fact almost every online travel booking site today offers travel insurance as an optional extra and travel agents are trained to routinely offer their clients  travel insurance.

After spending some 25+ years in the travel insurance business I have come to the conclusion that most people simply do not comprehend the financial risks they take on when travelling without the financial protection offered by travel insurance.  No one would question the importance of having house insurance to protect their largest financial investment in the unlikely event of a catastrophe which could leave them homeless and penniless.  No one in their right mind would drive a car without auto insurance to provide financial protection against accidents which may cause physical damage to property or worse, personal injury.

So why is Travel Medical Insurance any different than home and auto insurance – a necessity?

In my experience, most non-buyers  think  travel insurance is about  “heat attacks” or some other major medical complication that will never happen to them personally.  Either because of their relative age (older people tend to buy travel health insurance) or because they feel they are in the prime of their life.  The general feeling from non-buyers is “I’m not going to get sick” or “if I get sick I’ll just come home” or “nothing is going to spoil my vacation no matter what” mind set and therefore they simply don’t see the need in having travel medical insurance regardless of the cost.

There is a ton of information online about all the travel insurance products available, prices, coverage’s etc with many options offered by many reputable insurance companies in Canada at all price points. However, none of this matters if you are not already convinced  that travel insurance, like home and auto insurance is an absolute necessity. It’s not about the cost or coverage or benefits of one policy vs another or one company service over another, it’s more basic than that. Simply put non-buyers are non-believers pure and simple.

The truth of the matter is that Travel Insurance is not just for the sick or the elderly, it’s really a safety net for anyone travelling out of the country to prevent financial disaster in the event of an unexpected event happening to you while away from your normal surrounding. It is not hard to conceive a situation where you find yourself  in need of emergency assistance due to an accident, sickness or medical problem necessitating emergency treatment or medical evacuation if necessary back home or to the closest medical facility (many countries lack proper medical facilities) either in the country or another county.

Still not convinced, then you might want to read this blog posting by Lisa Chan http://cadencechan.wordpress.com/2010/01/12/thank-goodness-for-travel-insurance/ who writes  “I urge you all to forward this message to all those you care about to ensure that they are never caught in a position to have to mortgage or sell their house to pay for travel medical expenses”

Lisa’s daughter Cadence was hospitalized in Hong Kong back as a result of a terrible accident and required emergency surgery. The local hospital in Hong Kong was not equipped to treat the child’s injuries as a result of the accident. This meant that the patient had to be transported via Air Ambulance to another hospital, so the decision was made to immediately fly Cadence  back to her home province via Air Ambulance for treatment and recovery in Canada.

The cost of the Air Ambulance from Hong Kong back to Canada with medical personnel was $160,000 alone.  The total costs paid out by the travel insurance company after all said and was over $185,000 including the Air Ambulance, hospital expenses and other out of pocket travel expenses including meals, hotel and telephone calls.

Without travel insurance, the family would have had to pay the Air Ambulance Company $160,000 – cash up front  because this is not covered by Provincial Health Insurance.

Lisa’s writes  “without insurance, would it even be a possible for us to make it back to Vancouver??? Thank god we bought travel insurance!!!

Unlike home and auto insurance, travel medical insurance is optional and too many people simply opt not purchase a policy and are putting their family at risk for potential financial ruin… you never hear someone saying “thank god we bought house insurance” after a fire destroys their home.

I personally believe travel insurance like auto insurance should be mandatory for everyone who leaves the country and that anyone who decides not to take travel medical insurance protection would be require to sign a waiver explaining in simple terms the financial risk of not having travel insurance.

Always travel Safe & Secure – Goinsured!

Mark Anevich
Travel Insurance Expert

LinkedIn Profile

THIA which is a national organization representing Canadian travel insurers also indicated that most insurers are also providing policy extensions at no extra charge to travellers who were stranded beyond the expiration dates of their policies.

This is certainly good news to anyone who purchased travel insurance!

Trip Cancellation & Trip Interruption

This means that for those savvy travellers who purchased a travel insurance policy which includes Trip Cancellation will be entitled to make a claim for any additional costs incurred as a direct result of the volcanic eruptions. Typically, most Trip Cancellation policies include limited benefits for Trip Interruption and Travel Delay providing reimbursement for the cost of additional accommodation and meal expenses.

Some policies also cover for the cost of alternative travel arrangements in the event of a missed connection or travel delay. But not all policies are the same or offer the same coverage so you really need to contract your insurance company to find out what benefits, if any you may have for your specific situation and how to make a claim.

Travel Insurance Claims

Travellers whose flights were cancelled and never left Canada will be entitled to obtain a refund from their airline or reschedule their departure. The airlines however will not pay any compensation for losses due to non-refundable pre-paid travel arrangements such as hotels accommodation, cruises, tour package or car rentals etc. In these cases you may be entitled to make a claim under your Trip Cancellation coverage for any non-reimbursable, fully insured and prepaid portion of the trip, including airfares, pending cruises, land tours, hotel stays that you may have book separately.

For all-inclusive packages booked through an airlines or tour operator which included airfare and hotel you may be offered vouchers for future travel in lieu of immediate refunds. In these cases you may not be entitled to make a claim under your Trip Cancellation policy because you have not suffered a financial loss.

Future Travel

The financial impact of claims resulting from the volcano are expected to be as significant as the 9/11 event and insurance companies are expecting to pay claims in the millions of dollars. This has increased the awareness of the importance of travel insurance and as a result many more people are considering purchasing travel insurance for their next trip which is always a smart idea.

It is important to note however, that most Canadian travel insurance companies have considered the disruption to travel resulting from the volcanoes in Iceland as an event that is covered if the insurance was purchased or in effect before April 14. Travel insurance covers unexpected events and since the volcanoes in Iceland continue to remain a threat you would not be able to claim for losses due to this same event in the future.

Always travel Safe & Secure – Goinsured!

Mark Anevich
Travel Insurance Expert
LinkedIn Profile

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Mr. Hunter who recently met with senior Cuban officials advises that the new medical insurance requirements for travel to Cuba from May 1, 2010 onwards will have little or no effect on Canadian citizens. Maria Elena Lopez Reyes, Vice Minister of the Cuban Ministry of Tourism says that “The process for seeking treatment and making an insurance claim will be handled the same way it always has been.”

This does not mean that Canadian’s should not purchase additional travel insurance when travelling to Cuba. Most provincial health plans only pay a fraction of the cost of health treatment received out of the country. Provincial health plan also do not cover the expensive cost of air ambulance evacuation in the event of a serious medical emergency requiring transportation back to Canada.

The good news is that Canadian travellers will not be forced to purchase the inferior medical insurance provided by the Cuban government, the bad news is some Canadian’s may think they don’t need additional travel insurance which would be a big mistake.

Therefore the best advice for visitors to Cuba is to make sure you purchase travel health insurance . According to THIA (Travel Health Insurance Association) http://bit.ly/cshI0G Cuban officials advised that there is not a list of approved insurers (as was previously reported in an earlier posting to this blog) but that any travel insurance policy issued by a registered Canadian travel insurance company will be accepted. .

Always travel Safe & Secure – goinsured!

Mark Anevich
Travel Insurance Expert
LinkedIn Profile

Many international travel insurance companies have recently issued statements that they will consider the “dust cloud” caused by last week’s volcanic eruption to be weather related. This is an important distinction because most typically travel insurance policies do not cover natural disasters.

In general terms travel insurance covers very specific “named perils” otherwise known as insured benefits which are listed in the policy and clearly defined. Trip Cancellation policies are not intended to cover every and any possible scenario or event that might give rise to your trip having to be interrupted due to delays and misconnections or having to cancel outright. Therefore, if the exact cause of cancellation, delay or interruption is not specified in your travel insurance policy then you are not entitled to claim any benefits.

Trip Cancellation Insurance Benefits

Does your travel insurance policy specify “volcanic eruption” or “natural disaster” as a specific benefit? In all likelihood most travel insurance policies do not specifically mention “volcanic eruptions” with the exception of RBC Travel Insurance which does cover delays and misconnections as a result of “volcanic eruptions”. Some travel insurance companies cover claims resulting from “natural disasters” but only when the “natural disaster” causes your home to become uninhabitable forcing you to cancel your trip as a result.

Most policies do however provide some form of benefits for extra cost of meals and accommodation and/or extra cost of flights in the event you are delayed or misconnect due to weather conditions. So is a “volcanic dust cloud” a weather related incident? Semantics can make all the difference in the world as it is up to the individual insurance company and their approach, each travel insurance company makes their own determination.

You need to check with you individual travel insurance company to find out what their position is going to be and depending on your situation what if any benefits you are entitled too under the terms and conditions of the policy. Tim Bzowey, Vice President of RBC Insurance was recently quoted as saying “If people have purchased cancellation and interruption insurance in their travel insurance, whether it be in a package or stand-alone basis, they’re likely to have some type of benefit related to this particular event, the volcanic ash volcano in Iceland,”, but this might not be the case for other insurance companies.

What can you expect from the airlines?

Most Canadian airlines will be allowing you to re-book your flight without penalty or get a full refund your flight was cancelled. Air Canada is allowing re-bookings at no cost for later dates — provided the availability is there and if you elect to cancel, you will get a refund. Check the website of your airline, because conditions and offers will change continually with the situation.

Many passengers may wonder whether they’re entitled to a travel voucher of other perk for having been inconvenienced. But in this case, the chances of receiving any compensation aren’t good. That’s because volcanoes are considered “acts of God” – an incident that is out of the control of the airline.

European air carriers offer more in terms of covering your hotels/meals/costs associated with delays because they are governed by an EU passenger bill of rights. But even that isn’t a certainty since some major airlines in Europe are trying to dispute that aspect of the bill of rights.

To find out what your airline’s policy is, the airline’s entitlements are listed under the its conditions of carriage or tariffs.

Travel Insurance Policy Extensions

Many travellers have been stranded in international airports or waiting in Canada to get out on flights. As a result, if your original return date of travel is going to be later than was originally planned make sure that your travel insurance company will automatically extend your policy. This is critically important because if your policy expires and is not extended you will no longer have coverage.

Always travel Safe & Secure – travel insured

Mark Anevich
Travel Insurance Expert
LinkedIn Profile

Flight Delays & Missed Connections

This has resulted in travellers having to pay for unexpected hotel accommodations, extra meals etc. Some airlines have provided hotel vouchers for passengers’ but this might be limited to one nights’ accommodation only where 2 or more nights were required. Check you airlines web site to find out what their policy is with respect to rebooking flights, refunding airfares or the cost of hotel accommodations.

If your flight is cancelled, some airlines are providing either a full refund or an alternative flight. But what happens if your flight was connecting to a cruise or tour? You may be able to obtain a refund or credit for your airline ticket but it is doubtful the cruise line or tour operator will provide a refund which could cost thousands of dollars!

Some airlines may decide not to provide any compensation if the delay or cancellation can be termed as ‘extraordinary circumstances’ under their policies. It is important to check with your airline or visit their web site to find out what their policy is regarding your specific situation.

 Travel Insurance

Trip cancellation, travel delay or trip interruption are standard benefits in most travel insurance policies provided you had purchased Trip Cancellation Insurance or a comprehensive insurance package which includes Trip Cancellation. These policies typically provide reimbursement for the extra cost you may incur for non-refundable travel arrangements, additional cost to purchase airline tickets in the event of a missed connection to get to your planned destination and in some cases additional travel expenses related to accommodation, meals etc. 

So, does that mean that claims resulting from the volcano eruption are covered?

Not necessarily, all travel insurance policies differ and there is no standard set of conditions which applies to this kind of situation which is quite rare. One of the leading Canadian travel insurance company’s policy specifically covers “Delay of connecting passenger plane resulting from volcanic eruptions”. 

Most policies however do not specifically list this type of “volcanic” event and as a result claims resulting from the volcanic cloud may NOT be a covered risk.  In some cases the travel insurance policy may in fact exclude this type event as an “Act of God” or ‘Force Majeure’ which is not intended to cover natural or unavoidable catastrophes. 

You  have to read your policy very carefully. For example a typical  policy states that a missed connection or delay must be due to due to weather conditions, mechanical failure of the common carrier, a traffic accident, or an emergency police-directed road closure.  Therefore, if the delay or missed connection is a direct result volcanic dust cloud will the insurance company consider this to be a delay due to weather? If not you would not have a valid claim.

The larger concern is for travellers who have now been delayed by up to a week and may not be able to travel when flights resume due to holiday schedule. In this case being offered an alternative flight more than a week later is not going to be of any use and the traveller may elect not to travel. Some travel insurance policies will pay “Trip Cancellation” claims if your holiday has been delay for at least 30% of the total duration, but again most policy state that the delay must be due to weather.

Contact your travel insurance supplier who can advise you on what their individual policy covers under this situation. 

Policy Extensions & Assistance 

What happens if your trip is delayed resulting in your being away more days than originally planned? 

Many travel insurance policies provide “automatic extensions” for situations like this but the extensions may be limited to 3 days. Make sure you get confirmation from your insurance company that your policy will be extended by calling the 24/hours assistance call center. The assistance call centre can also provide you with rebooking flights and help get you on your way or home safely. 

Always travel Safe & Secure – travel insured

Mark Anevich
Travel Insurance Expert
LinkedIn Profile

April 17, 2010

I have been in the travel insurance business for over 25 years and have read many policies which takes me more than a hour on average due to the complexity of the text.  Reading your travel insurance policy is one thing, comprehending what is basically a legal contract is quite another. In my experience most travel insurance policies are not written in plain language, are extremely difficult to understand even for the most experienced traveller and are intended to protect the travel  insurance company in the event they choose to deny your claim.

Policy Definitions

All travel medical insurance policies sold in Canada include a long list of definitions of commonly used words. For example, one of the leading travel insurance company’s policy included over 30 definitions which took more than 1,500 words – almost 15% of the policy was dedicated to defining commonly used terms. These definitions also included verbiage that was designed to limit, restrict or exclude coverage.

For example most people would naturally expect that their travel medical insurance would pay for prescription drugs should they become ill when travelling.  Here is an example of a typical travel health insurance policy’s definition of “Prescription Drug”;

Prescription drug is  “drug or medicine that can only be issued upon the prescription of a licensed physician or dentist and is dispensed by a licensed pharmacist”. Prescription drug “does not mean such drug or medicine, when you need (or renew) them to continue to stabilize a condition which you had before your trip, or a chronic condition.”

In this example the travel insurance policy defines what is meant by “Prescription Drug” and what is NOT meant – confusing to say the least. In other words, buried inside the definition of Prescription Drugs is an exclusion which can be used by the insurance company to deny your claim if you’re prescribed any medication for a pre-existing condition.

Many definitions of standard terms in a travel medical insurance policy are really exclusions, limitations or conditions in disguise that can be used by the insurance company to reject or deny your claim or otherwise reduce benefits.  A more serious example of this is the definition of the simple English word “Stable”.  Every travel insurance policy has a different definition of the word Stable and it is critically important because it will affect your claim which may be denied as a result.

Under Webster’s medical dictionary the word  “Stable” is defined simply as “not changing or fluctuating, the patient’s condition was listed as stable” (11 words). Here is an example of typical definition of the word “Stable” in a travel health insurance policy;

Stable – any medical condition or related condition (including any heart condition or any lung condition) for which there have been:

• no new treatment, new medical management, or new prescribed medication; and

• no change in treatment, change in medical management, or change in medication; and

• no new symptom or finding, more frequent symptom or finding, or more severe symptom or finding experienced; and

• no new test results or test results showing a deterioration; and

• no investigations or future investigations initiated, or recommended for your symptoms; and

• no hospitalization or referral to a specialist (made or recommended).

Here again a simple word is defined in the travel insurance policy with 100 words and includes very specific language which may limit your coverage and result in a claim denial. You may have reasonably felt that a medical condition that had not changed prior to travel ie. “Sable” would be covered under your travel medical insurance policy. Unfortunately this may not be the case if your claim is reviewed using the stricter definition.  In fact many claims are  denied by travel insurance claims departments simply because your doctor has changed your medication prior to travel or there was “new medical management” whatever that means?

Policy Benefits

The average travel insurance policy provides 15 to 20 benefits or sometimes called the “what’s covered” section of the policy which is the main reason why you choose to purchase the travel insurance policy. These benefits typically include such things as hospitalization, physician fees, prescription drugs, ambulance (air and ground), emergency dental treatment etc. This is the section of the policy that most people pay closest attention to in order to compare one policy to another before making a purchase decision.

In one of the leading travel insurance company’s policy the “What’s Covered’ section had 15 specific benefits numbered 1 through 15 and took 1,800 words to describe.  However, the policy also includes a “What Is Not Covered” section with 26 exclusions that took almost as much space and as many words.

Most of the exclusions  are standard in every travel medical insurance policy and are common sense such as “If you incur expenses covered under this insurance due to the fault of a third party, we may take action against the party at fault” which is reasonable. Others are more restrictive and can substantially impact the quality of the coverage you’re purchasing and vary significantly from insurer to insurer.

For example a more serious exclusion that can be used by an insurance company to deny your claims is;

“Any medical condition if any answer provided in your medical questionnaire is incorrect, in which case the policy is void and the premium paid is refundable at our option.”

This means that if you had to complete a medical questionnaire to purchase the travel insurance, when you submit your claim the travel insurance company will obtain medical information from your physician. If it turns out that the information you provided on the insurance application is different from what is listed on your medical records your claim can be denied.

Claim Denial

There was a real life example of a large claim over $50,000 that was denied by an insurer using this exclusion.

In that case the person had been rushed to the hospital for emergency treatment of a respiratory problem while vacationing in Florida. After investigating the claimant’s medical records provided by their family physician in Canada, the insurance company determined that this person had been prescribed 2 medications for a lung condition. Although the claimant’s condition was “Stable” prior to travelling and would have been covered, the travel insurance company denied the claim because the person had only indicated that they were on 1 medication not 2 as was recorded in their medical records.

Did this person intentionally mislead the insurance company in order to get a lower rate?  In fact the reason why they had only indicated 1 medication was because they were using a “puffer” or inhaler to treat their lung condition – 1 prescribed device so they thought. Unfortunately, they were not aware that the “puffer” they were prescribed by their physician actually contained 2 different medications in the single device. A simple error and misunderstanding on their part caused their claim to be denied.

Know Before You Go

Now you know why every travel insurance company policy includes a disclaimer that the policy is subject to terms and conditions which may limit coverage and that you should “READ YOUR TRAVEL INSURANCE POLICY CAREFULLY”.  Please read your policy and if you are unsure of something in your policy contact the insurance company and ask questions.

As the old saying goes you get what you pay for! This is especially true when shopping for travel insurance so make sure you understand  “what’s covered” and more importantly what is “not covered” which is often a much longer list.

Always travel Safe & Secure – GoInsured

Mark Anevich
Travel Insurance Expert
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