Travel insurance purchase requires diligence

Travellers looking for fun in the sun or a relaxing time away from the hurly-burly of life at home hardly want the additional stress of an unexpected illness or accident while they are away.

But as some Canadian travellers have discovered, buying travel insurance to protect against a nasty financial surprise may not necessarily mean full protection from hefty bills for medical treatment outside their home province.

On Monday, CBC 's Go Public reported on three customers who purchased travel insurance from Canadian banks and were left angry and frustrated after their insurer wouldn't pay their foreign medical bills.

There are, however, ways a would-be traveller can try to make sure there are as few surprises as possible if they have to make a claim. In some cases, those ways depend on the person's age, and the purpose of their trip.

• Go Public: Travel insurance doesn't pay for these bank customers

1. Know your health and ask questions

In many instances that have received public attention, questions and debate around pre-existing medical conditions have been at the heart of disputes between travellers and insurance companies.

Insurance experts say having an open, honest and upfront discussion with your insurer or an insurance professional before buying a policy is critical.

"Probably the biggest thing for a person to do is to give as much medical or background history as they have when they're purchasing [insurance]," says Bill Walker, director of individual products for Ontario Blue Cross. The same goes for when answering questions for a claim.

"For the most part, largely, when a claim gets denied, it's not some type of purposeful nondisclosure or fraud. It's just the person has decided that this is an irrelevant piece of medical history."

Information about hospitalizations, treatments, investigations or even a change in medication is relevant.

Along with providing information, asking questions is a good practice, too.

"Ask a professional … how am I covered?" says Alex Bittner, vice-president of the Travel Health Insurance Association of Canada.

If a person has a valid reason why they believe that claim should not be denied, there are steps they can go to appeal.- Bill Walker

He suggests telling the insurance professional: "I want to go through the application with you. I want to actually see the policy. I want to see how my pre-existing medical conditions are affected, and go into it anticipating that you're going to have a claim."

If a person is unsure about a specific question, then Bittner suggests going to the family doctor and seeking advice.

Some people might say they answered medical questions to the best of their knowledge and didn't know that previous bits of their medical history, such as a test years ago might be a red flag now, or something that's not a health concern for them.

If that's the case, Bittner suggests claims might not be denied on those grounds.

"If they honestly didn't know, we're not going to hold that against them. We're not."

If a claim is denied, it's not necessarily the end of the road.

"If a person has a valid reason why they believe that claim should not be denied, there are steps they can go to appeal," says Walker.

Companies have ombudsmen, as does the industry. Court action is also a possibility.

2. Read your policy

Amid the excitement of planning for a trip, reading a travel insurance document might not seem like the most inspiring way to spend some time. Plus, it's not going to be a speed read like the latest spy thriller.

But the experts say one of the most important measures a would-be traveller can take is reading the document. If buying the policy online, download the document and go through it carefully.

"I know travel policies are not uncomplicated, small, little documents," says Walker.

"But I think if a person was to sit down and read it before they go on their trip, that way they're doing what they need to do to ensure the least possible chance of a problem with a denied claim."

If you don't understand something, the experts suggest, call the company and ask questions. Calls are usually recorded, so make a record for yourself of the date and time of the conversation and consider recording it yourself.

3. Think about what you will be doing on your trip

If you've read the policy carefully, you may know whether it would cover you for certain activities. 

Hazardous, high-risk or adventurous activities like skydiving or rock climbing might not be covered. Even scuba diving might fall in that category.

"There are some that do [cover it] and there are some that don't," says Bittner.

Taking your son or daughter to a sports tournament in the U.S. might also be problematic.

"I'd be asking those penetrating questions," says Bittner, suggesting that a parent find out if a youth athlete would be covered under the policy in question, "because every policy has I would say significant limitations and exclusions for coverage."

4. Think about where you are going

Quick trips over the border into the U.S. or cross-Canada vacations might not seem like prime examples of instances when travel medical insurance is necessary, but experts say that's not so.

Even a quick trip from southern Ontario to Buffalo to catch a Bills football game or to check out bargains at a mall should be insured, they say.

"I've seen … a $90,000 claim incurred in Buffalo from a person who had a major brain aneurysm and couldn't even be taken back across the border, so it's imperative, especially in the States," says Walker.

Bittner says Ontario only covers six to nine per cent of medical costs a person might incur in the U.S.

"On a $100,000 bill, [the Ontario Health Insurance Plan] pays $9,000," he says, leaving a bill worth " a lot of money."

Even in Canada, Walker says, Blue Cross recommends travel insurance if a person is going outside the home province.

While there is basically the same public health system across the country, some provinces charge more for some services than others, and vice versa. A trip between provinces in an air ambulance would not be covered, for example.

Also be on the lookout for country- or region-specific coverage. Some U.S. companies won't cover travel to Cuba, for instance. Other companies may not cover places for which the Canadian government has issued a travel warning.

Not looking to deny claims

Both Walker and Bittner acknowledge there is a broad perception that insurers may be looking for ways to deny claims but both say that's not the case.

Walker says companies have taken steps to make it "at least a little easier" for people to understand policies.

"No company, especially with a brand name like a bank, or Blue Cross for that matter, or Manulife, these are all companies that invest a lot of time to gain the confidence of their customers, so they don't want their confidence shattered because a claim has been denied."