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Know your insurance policy before you travel

Last time I discussed the three main types of travel insurance: medical, trip cancellation and trip interruption.

Last time I discussed the three main types of travel insurance: medical, trip cancellation and trip interruption. In addition, there were four main ways that you could achieve complete/partial coverage: work insurance, private insurance, credit cards and your travel/tour company.

This week I would like to give you some case studies that will emphasize the importance of adequate travel insurance coverage.

Situation 1: Client A purchased a 10-day land package worth $2,950 per person.

She indicated that her bank credit card provided complete medical, trip cancellation and trip interruption coverage. As a result she signed the travel agency ‘insurance waiver form.’ Client A arrived at the airport, checked in but before boarding the plane became ill and had to return home.

Outcome: The client was covered by her credit card with medical of $1 million with an eight-day limit annually, trip cancellation up to $1,000, trip interruption up to $5,000. However, her trip interruption began once the plane left the ground and the medical coverage was two days short of complete coverage.

Once all paperwork was submitted the credit card company paid out $1,000, leaving the client to absorb a loss of $1,950 per person.

Lesson: Have the specific terms of the coverage explained to you in each situation. It is not that you have coverage but that you have the ‘right coverage.’

Situation 2: Client B decided to take a 10-day cruise. He decided to purchase the ‘cruiseline insurance.’

This insurance covered medical, trip cancellation and trip interruption and baggage. The deciding factors for the client in purchasing this insurance were price and a cancellation policy that provided cruise credit upon cancellation for any reason. While on the ship, client B visited the ship’s physician for possible gout. The result of the check-up and prescription for pills was a bill for $137. The client paid it in full and received a receipt.

Outcome: Upon returning home, client B called the cruiseline insurance company and had them send out the appropriate forms for reimbursement. Two weeks later the forms arrived, but after review he found out that he had to first send the receipt for reimbursement to the government health plan. Once he received a letter of reimbursement from them, the letter was to be attached to his submission of insurance forms and the remaining amount was to be paid out by the cruiseline insurance company. However, it took nearly six months to get it processed by the government health plan, and another two months by the cruiseline insurance company.

Lesson: Select an insurance company that reimburses the total expense in one transaction (co-ordinates payment with government health plan and/or credit cards).

Situation 3: Client C books a trip to Hawaii in December and takes out private insurance through a travel agency to cover medical, trip cancellation and trip interruption.

Once settled in Hawaii, he has a heart attack and is rushed to the hospital. The resulting bill for the stay and treatment in the hospital was $32,090.

Outcome: Upon returning home his wife requested the insurance forms and promptly completed them. Two weeks later he is denied coverage because of a “pre-existing condition” (not being stable). Medical insurance takes effect if the condition that you are seeking treatment for was stable in the previous 90 days before you leave on the trip. During this 90-day period client C had visited his physician and, after tests, was placed on new heart medication.

Lesson: Read or have someone explain all the implications of your policy.

Situation 4: Client D decided to drive between provinces for a family reunion.

Unfortunately, the client is in a serious car accident upon arrival in the destination province. An ambulance is called and the client is taken to the nearest hospital, but because of the serious of the injuries is air lifted to a larger, more specialized hospital.

Outcome: The client was required to pay the ambulance and air ambulance bills plus an assortment of other hospital bills as his home province had a number of exclusions as to what they do not pay elsewhere.

Lesson: Insurance is required when you travel outside your province.

Bill MacDonald is a St. Albert-based travel consultant. He can be reached at [email protected]