Too often, people assume that they have all the travel insurance protection they need just by carrying their credit card. But this complimentary benefit is a “one size fits all” product. It may not need your specific needs.
Just like travel insurance provided with employer group benefits, there are many gaps in the coverage, and you don’t want your financial security to fall through the holes if the unexpected happens. That can be an expensive mistake.
It is quite likely that you will need supplemental coverage, depending on your specific requirements. Here are a few things you need to know before heading off on your travels.
Read your credit card travel policy information to get a basic understanding of what you are and are not covered for. Are the details a mystery or only based on a promotional pamphlet?
Request a copy of the full documentation! You should have it at hand and be able to call your credit card insurer to help you understand any parts of the policy that are unclear. Most credit card travel insurance plans are underwritten by a traditional travel insurance company, and contain a lot of the same conditions.
What does your credit card policy cover? Here are typical coverages and amounts:
- Travel Medical $1,000,000 – $5,000,000 and unlimited
- Trip Cancellation $1,500 per person – $2,500 / $2,500 – 10,000 maximum
- Trip Interruption $1,500 – $2,500 per person / $5,000 – 25,000 maximum
- Flight Delay $250 – $500 per person – 4+ hour delay
- Lost Luggage $500 – $2,500 maximum
- Travel Accident $500,000 – $1,000,000
Remember, most of the insurance is only provided if you have used your credit card to pay for 75% or more of the trip costs. Travel medical protection may be available if you haven’t, but you should be clear about whether it is covered or not.
Don’t mistake Travel Accident coverage for Travel Medical coverage that pays for medical expenses. Travel Accident is a life insurance policy that pays out smaller amounts for the loss of any of the following:
- One or both hands
- One or both feet
- Total sight in one or both eyes
- Use of upper or lower limbs
- Use of upper or lower limbs on one side of your body
Every credit card provider offers different protection, so check the basics:
- Do the benefit maximums change as you age, particularly over age 65?
- Is there a maximum age for coverage?
- If a supplementary cardholder uses the card for a trip, are they covered if they don’t travel with the primary cardholder?
- If you pay for someone else’s trip on your card, are they covered?
Remember, no-fee cards typically provide lower benefit maximums and cover fewer days than credit cards that charge a fee.
Depending on your card, you might not be covered in many situations:
- extreme sports, or even for something as common as snorkeling
- entering a country on the Canadian Government Travel Advisory pagethat’s marked as unsafe
- having pre-existing conditions, or even be covered at all if you’ve been admitted to a hospital or had a change in your health in the past six months
- being pregnant.
If you have used ‘points’ to purchase your trip and paid the balance on your credit card, only the balance will be covered for trip cancellation. Your points may be reinstated (with a penalty).
While adequate trip cancellation coverage is important, the financial impact of a medical emergency away from home can be far more costly.
Here are some key factors to consider in deciding whether you need supplemental travel medical coverage, as recommended by the Canadian Life and Health Insurance Association:
- Do you have to pay for the trip on your credit card to be eligible for coverage?
- Does the policy cover your family or anyone travelling with you?
- Do all people covered have the same level of coverage?
- Does your policy pay for emergency return home?
- Will the policy provider pay hospitals directly or do they reimburse what you pay up front?
- Will your policy cover you for the entire length of your absence from Canada or your home province?
- If you decide to extend the length of your stay, can your policy be extended?
- What types of restrictions and limitations apply?
- Does your insurance company have a toll-free telephone number for emergency assistance that you can reach from anywhere you travel?
- What documentation is needed to submit a claim? What are the procedures?
*Source: CLHIA Travel Insurance Guide
Regardless of what type of insurance coverage you have for your travels, it is wise to always be sure you have read the policy yourself and discussed any potential gaps with an insurance professional. At SBIS, we can help.