As summer travel season approaches, many Canadians are weighing their emergency travel coverage choices in light of higher premiums and more stringent border enforcement. With costs increasing, experts urge travelers to evaluate their coverage carefully to ensure they are adequately protected during their trips. Large industry stakeholders, such as Dan Donnelly of Travel Insurance Office Inc. and Martin Firestone of Travel Secure, explain their perspectives. This data illuminates the changing state of the travel insurance industry.
This year, travel insurance premiums for Canadians have already increased by about 8 percent. Some providers have gone as high as 12 percent in increases. Dan Donnelly, president of Travel Insurance Office Inc. in Markham, Ontario, points to the effect of increasing costs. Travelers are preparing for a very busy summer travel season. A healthy 73-year-old currently pays about $1,200 for a 100-day trip insurance policy. In comparison, a healthy 67 year-old would pay about $850 for the same amount of coverage.
The impact of these increasing expenses couldn’t be greater. For older travelers or those with pre-existing health conditions, the premiums can more than double. “Two million might not even be adequate anymore,” cautions Donnelly. He cites examples, including one where claims have increased all the way up to $2.4 million. This sobering truth makes it all the more vital to know just how adequate that coverage really is before you hit the road.
Understanding the Cost of Coverage
Travel insurance can be pretty pricey especially as it relates to age and health. For worldwide coverage, a 66-year-old traveler will pay an average of $281. If they choose travel outside of the continental U.S., the price decreases to around $259. These figures jump dramatically for seniors. As another example, a 71-year-old person would spend an average of $417 for coverage that includes worldwide travel and $371 for travel without coverage that includes the U.S.
Travelers who want the most flexibility possible should go with a 35-day itinerary. This option provides for more than one trip per year, with coverage for each trip of up to 35 days. To dig deeper on what affects the pricing of travel insurance, we turned to Martin Firestone, a travel insurance specialist at Travel Secure. “If you’re going one to 65 days, the daily rate would be, let’s call it $10. But if you take it for 128 days, that effective per diem rate can drop down to $11.50 per day,” he points out.
Whatever the case may be, the onus is on the traveler to take a much closer look at their needs. Although many credit cards offer travel insurance coverage, these protections usually max out at around $5k. For the majority of otherwise healthy Canadians under 65, especially those with less serious pre-existing conditions, this will be enough. For older travelers and those with existing health concerns, there could be considerable out-of-pocket costs.
The Risks of Underinsurance
The risks of being underinsured are extreme, and it’s impossible to stress that enough. Donnelly emphasizes the importance of comprehensive plans by illustrating a scenario involving domestic travel: “Let’s say you’re driving across Canada, you’re somewhere in Alberta, you’re in a major car accident, and they have to bring an ambulance and take you to the hospital. Whether you like it or not, an ambulance ride is going to charge you.
This case highlights the importance of thinking through every angle of what could happen while traveling when choosing insurance policies. The dramatic rise in health care costs. It is essential that travelers—who are seeking experiences beyond their front doors—are protected from unexpected financial burdens with proper travel insurance coverage.
Natasha Macmillan, senior business director of everyday banking at Ratehub, recommends that travelers take the time to compare different insurance options before making a purchase. She recommends, ‘Know exactly what each plan covers. That will allow you to match it up with your travel plans and be sure you’re not going to be hit with surprise charges.
Making Informed Decisions
As the world of travel insurance evolves, Canadians need to be equipped with knowledge about their options and their rights. With recent increases to premiums, many Americans are forced to reconsider what coverage they need. This is particularly true for Canadians who are considering travel outside of the country or who have underlying medical conditions that might further complexify matters.
