Travel Insurance 101: Travel to Canada

Excited to climb Canada’s jaw-dropping mountains? Snowboard or ski down fresh powdery slopes?

Whether it’d be your first time or your 50th time participating in Canada’s outdoor activities, it’s important to make sure you’re covered in the chance of an accident. Even if you're not into these activities, unfortunate events like illness can hit the best of us with no warning.

While no one plans for accidents, these things happen and that’s why having travel insurance while you’re in Canada is heavily advised.

So let’s talk about travel insurance: common misconceptions, when or where you should buy it, and some frequently asked questions.

What exactly is travel insurance?

A lot of people get confused when they hear the term travel insurance, so let’s first clear this up. Travel insurance is something you buy to protect you from risks associated with unforeseeable events while travelling— lost bags at the airport, trip cancellation or disruption, natural disasters, and much more.

There are many things that travel insurance covers, but no travel insurance covers everything. That’s why choosing the right policy requires basic knowledge and taking inventory of your interests, needs, and travel plans. Doing so will put you in a better position to choose the best policy specifically tailored to you.

Travel insurance misconceptions

There are countless horror stories on the internet surrounding the topic of pricey medical bills as a result of misunderstanding insurance policies. We’re talking five-digit unexpected expenses ($10,000+). To avoid being on the bad end of these stories, read on to learn common misconceptions people have about travel insurance.

• “I’m already insured in my home country”: Your home country insurance more than likely won’t cover you internationally and if they do, it’s most likely that you don’t have the same benefits overseas as you do at home.
• “I’ll be covered by Canada’s free healthcare”: Although some people could be immediately covered, there could be up to a three month gap when you first arrive that you will not be covered.
• “I’m not into crazy high-risk activities, so don’t need travel insurance”: Travel insurance covers a lot more than high-risk activities, such as canceled flights, an unexpected illness, flights to go back home in case of a family death, etc.
• X travel insurance is better than Y insurance because it’s cheaper”: Typically, cheaper insurances cover less in the case of an incident. Would you rather pay an extra $500 now or potentially go bankrupt with medical debt because your coverage was too low?
• How much is travel insurance? Usually, travel insurance is calculated per day, and for a full year, you can be looking at anywhere between $1000 CAD to $3000 CAD per year.

And now the big question...

Should I buy travel insurance before or after landing in Canada?

You should buy as close as possible to when you book the tickets. You’ll likely still have options if you shop after arriving at your destination, but it’s not guaranteed. If you do have options, they tend to be more costly. Plus, a big benefit of travel insurance is trip cancellation, and peace of mind that your baggage is insured in the worst case.

Even though it’s best advised to buy as close as possible to when you buy your ticket to Canada, it doesn’t mean you’re stuck choosing a company from home. Depending on your home country, you’ll likely want to determine if to buy from a home company or Canadian company.

The answer will depend on your home country. As an example, many people from India recommend buying from a Canadian insurance company because Canadian hospitals work more closely with Canadian insurance companies. This makes it easier to process a claim.

If you use a company from India, you risk paying the entire bill first and then waiting for reimbursement instead of just having the insurance company help you out upfront. Choosing a Canadian company may be more expensive than your options back home, but it comes with a smoother claims process.

There are many online comparison sites that you can find with a simple google search to compare different policies. The best comparison sites will differ from country to country. Additionally, you may want to join online groups (such as Facebook or travel forums) and either ask around or see what others in similar positions as you have gone with. Groups tend to share a few favorites.

Travel Insurance FAQ

• Is travel insurance mandatory? Certain visas, like IEC (International Experience Canada), make it mandatory for you to prove coverage for your entire time in Canada. Otherwise, you risk having your trip canceled or shortened. For example, if you have a two-year visa, but can only prove six months of coverage, you risk having your two-year visa turn into a six-month visa.
• What should I be mindful of? Depending on your visa, it may be mandatory or strongly recommended to have a policy that covers emergency evacuation and repatriation. Also, if you’re sure you’ll enjoy winter activities or things such as mountain climbing, then make sure your policy covers high-risk activities and winter sports.
• It is also heavily advised to read the small print and read your policy very carefully. A lot of people have had major disappointments from thinking they were covered for something, only to find out they weren’t or that they received a very small compensation for their claim.

What are some major terms and abbreviations to know?

• Excess (or deductible): The amount you’ll have to pay before the insurance company starts helping you with expenses. Typically, the cheaper the policy, the more costly the deductible.
• Exclusion: It’s a common mistake people make to assume they’re covered for certain things that they’re not. To find what you’re not covered for, look for the term “Exclusions”. For example, a common exclusion for some basic travel insurances are high-risk activities like snowboarding.
• OOP (Out of pocket maximum): This term specifies the most you’ll have to pay from your own money in a year before the insurance company starts covering the full cost. The deductible counts towards your out of pocket maximum, but the premium doesn’t. Once you reach your deductible, you’ll still have to pay a portion of the fees until your OOP maximum is reached.
• Premium: The amount you have to pay to be covered by an insurance company. The insurance company takes a risk by allowing you to be a customer, so one way that insurance companies make a profit is through their customer’s premiums. Premiums are most commonly paid all upfront for the year, twice a year, or monthly.

Conclusion

Remember, no one actively plans for an unforeseeable circumstance or accident. Accidents happen to the best of us. Medical costs can be heavy enough to set you back for years to come if you’re left paying out of pocket.

Not getting travel insurance puts you at risk of being on the wrong end of horror stories. Enjoy the peace of mind of having travel insurance while ensuring your trip to Canada is full of only your best stories.