After the COVID-19 Pandemic cancelled the majority of international travel, many Canadians were surprised to find out that flight cancellations often do not entitle them to a proper refund - only an airline credit. However, Canadians who had travel insurance (often through their credit cards) had a much easier time receiving refunds through their insurance company. This is just one recent example where travel insurance has benefited travelling Canadians, as it very often saves Canadians thousands of dollars on medical bills, trip cancellations and even rental car insurance.
We found 3 specific forms of travel insurance that are the most important to have - yet many credit cards lack them. We recommend you check the terms of your credit card and see whether your coverage includes these. Please note that travel insurance can vary between providers, so it is still important to carefully read your travel insurance terms!
Out-of-Province Emergency Medical Insurance
Out-of-Province/Country Emergency Medical Insurance is what I consider one of the most important forms of travel insurance, and it is offered by many credit cards.
What It Covers: As the name implies, Emergency Medical Insurance covers the fees of any medical treatment needed while out of your home province or country (up to a large maximum, typically $1-5 million). It is important to read this coverage carefully though, as it typically only covers you for a set number of days outside of your home province, based on your age. If you are under 65 years old coverage ranges from 7 to 31 days. If you are over 65 years old, coverage may not be offered at all, or if it is offered it is typically for a shorter duration (3 to 21 days). If you are travelling outside of the country for longer than this, we recommend buying travel medical insurance to extend your credit cards' coverage.
Who It Covers: Contrary to popular belief, you don't need to purchase your travel on your card to be covered by this form of insurance. Coverage will kick in immediately as soon as you leave the province. Typically the Cardholder's immediate family is also covered (spouse and dependent children), however, it is important to read the terms to see if you have this degree of coverage.
Conditions: There are several caveats to be aware of with most travel medical insurance coverage. First and foremost, they typically don't cover any pre-existing conditions (for example, if you are diabetic and ran out of insulin, this would not be covered) or self-harm (often including intoxication). The terms also usually explicitly exclude medical attention from extreme sports or activities. Most insurance coverage also requires you to call the insurance company as soon as you are safely capable of doing so. As always, insurance varies terms vary between cards, so be sure to read and understand your insurance booklet.
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Trip Cancellation Insurance
Trip Cancellation insurance is the travel insurance that people wish they had when COVID-19 cancelled their travel plans. Trip Cancellation Insurance, as the name implies, allows you to cancel your trip and receive a reimbursement. However, it is important to understand the terms of this insurance as you need a valid reason to cancel your trip generally. Cancel-for-any-reason Trip Cancellation Insurance does exist, but not through credit cards (you typically have to purchase this on your own and pay a premium).
What It Covers: Every insurance company has a list of "acceptable" reasons to cancel a trip that they will reimburse you for (up to a set limit, typically $1,000-$5,000 per covered traveller), but typically the rule of thumb is anything unpredictable (it was impossible to predict when you booked the trip) and would require you to stay in your current country or be unable to travel to the destination country. Check your coverage for the full list, but here are some examples of valid trip cancellation reasons: a death in the family of a traveller, a medical emergency of a traveller, a loss of job or job transfer, jury duty, or a travel advisory to a destination country. That last covered reason is what would have been invoked when the COVID-19 pandemic stopped most international travel, and if you had Trip Cancellation Insurance you would have been reimbursed.
Who It Covers: Typically Trip Cancellation Insurance covers the Cardholder and their immediate family (spouse and dependent children). Depending on the insurance coverage, a set number of travel companions could be covered as well.
Conditions: Unlike Emergency Medical Insurance, Trip Cancellation Insurance from a credit card only covers trip purchases made with that credit card. If you paid for even a small portion of that flight or trip with another card, it often would not be covered.
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Trip Interruption Insurance
Trip Interruption has nearly identical terms to Trip Cancellation Insurance (they are often under the same policy), however, instead of reimbursing you for a trip you haven't departed for yet, it covers you if you have to end ("interrupt") your trip early for an acceptable reason.
What It Covers: Similar to Trip Cancellation Insurance, Trip Interruption Insurance will reimburse you for the "unused" value of your trip, and additionally will cover expenses required to return home if your reason for doing so is covered. Typically this is up to a set limit per covered traveller, between $1,000-$5,000. The list of covered reasons is similar to Trip Cancellation Insurance but varies between insurance coverage. These may include a death in the family of a traveller, a medical emergency of a traveller, a loss of job or job transfer, jury duty, or a travel advisory to a destination country.
Who It Covers: Just like Trip Cancellation Insurance, Trip Interruption Insurance covers the Cardholder and their immediate family (spouse and dependent children). Depending on the insurance coverage, a set number of travel companions could be covered as well.
Conditions: Again, unlike Emergency Medical Insurance, Trip Interruption Insurance from a credit card only covers trip purchases made with that credit card.
Other Types of Insurance
Of course, even if you have three types of travel insurance with your credit card you're not covered for everything, and you may want to explore other types of coverage. For example, something like Rental Car Insurance (which is very common across credit cards) may save you hundreds over a year if you rent cars often. Be sure to look at the full insurance package your credit card offers and understand it well. We will be releasing a list of the best credit cards for travel insurance soon, so be sure to follow us on Facebook or Twitter.