Ignoring this travel insurance clause could cost you

The recent story of A Surrey, B.C., couple’s vacation gone wrong just goes to show how important it is for Canadians to fully understand the so-called “cheap” insurance policies they’re buying. Mel Milaney and her husband, Tom, were going on a three-week trip to Florida and the Caribbean in 2012. They considered purchasing health insurance from Pacific Blue Cross, their provider, but instead opted for a cheaper policy from RBC Insurance.

Compare travel insurance quotes from some of Canada’s top providers*

As they recounted to the CBC, Mel fell incredibly ill during the trip and the total cost of her treatment ended up exceeding $200,000 U.S. Their RBC Insurance covered it, but months later, the Milaney’s learned the bank had passed much of the bill along to Pacific Blue Cross, under the widely-overlooked (and totally standard) “first payer” clause. The fine print stated: “Any of our policies are excess insurance and are the last payers. All other sources of recovery, indemnity payments or insurance coverage must be exhausted before any payments will be made under any of our policies.” Mel’s lifetime maximum coverage from her group insurer is $500,000 and this incident alone, with the help of the “first payer” clause, meant she had burned through nearly one-fifth of this maximum. With a host of other monthly health costs, this clause means she could find herself without extended coverage in the future. The lesson learned? Read the fine print closely and make sure you know what you’re buying to avoid getting into a seriously bad situation. Here are a few other things to keep in mind when considering travel insurance, from our own easy-to-understand insurance guide: 1. You may already have it Start by checking your employer benefits plan to see if you’re already covered. Some credit cards also include travel medical and trip cancellation insurance. But check your policy closely to make sure you understand what coverage you have. Insurers often limit how much they’ll pay out for claims and restrict coverage to shorter trips—typically seven days or so. 2. Your travel agent rarely sells the good stuff Travel agents usually sell travel insurance and may offer it when you’re booking your trip. “These policies can often be much more expensive than getting insurance from an online provider such as Travel Guard,” says Gavin Prout, vice president of Special Benefits Insurance Services in Port Perry, Ont. To compare costs, use a service such as Kanetix.ca. You’ll get quotes from several providers on the spot. 3. If you travel twice a year, it’s cheaper to buy an annual plan For instance, a 40-year-old would pay $25 for emergency medical coverage during a one-week trip to Acapulco. By contrast, he could get an annual plan that would cover him for unlimited trips of 10 days or less in duration—almost anywhere in the world—for $60. An added benefit? If you just want to go across the border for a weekend, you’ll have a plan already in place. Got more questions about travel disability, life, auto or home insurance? Read “The Only Insurance Guide You Need.” It’s, well, the only insurance guide you need.

What does the * mean?

Affiliate (monetized) links can sometimes result in a payment to MoneySense (owned by Ratehub Inc.), which helps our website stay free to our users. If a link has an asterisk (*) or is labelled as “Featured,” it is an affiliate link. If a link is labelled as “Sponsored,” it is a paid placement, which may or may not have an affiliate link. Our editorial content will never be influenced by these links. We are committed to looking at all available products in the market. Where a product ranks in our article, and whether or not it’s included in the first place, is never driven by compensation. For more details, read our MoneySense Monetization policy.

Comments Cancel reply

Friends sit together on a rooftop overlooking a sky filled with hot air balloons

Credit Cards

The best travel credit cards in Canada for 2024

These impressive travel cards can help turn your everyday spending into flights, hotels and more.

The best travel credit cards in Canada for 2024

Travel

How to stay on budget this summer, wherever your vacation plans take you

Planning a staycation, a camping trip or an international getaway this summer? These tips will help ensure you don’t...

How to stay on budget this summer, wherever your vacation plans take you

Fire-fighting personnel arrive in the evacuated neighbourhood of Beacon Hill in Fort McMurray, Alta., on Wednesday, May 15, 2024.

Travel

Alberta wildfires’ effects on tourism in Canada

Wildfires cast smoky shadow over tourism industry ahead of unofficial start of summer.

Alberta wildfires’ effects on tourism in Canada

A large poster with seven photos of Taylor Swift and the words "Welcome to the Eras Tour"

Travel

No tickets for Taylor Swift in Toronto or Vancouver? See the costs of an international show

Canadians are travelling the world for concerts and other events. Here’s how to see the Eras Tour abroad—maybe for...

No tickets for Taylor Swift in Toronto or Vancouver? See the costs of an international show

A customer uses her credit card to pay for groceries

Credit Cards

Benefits, fees, hidden perks: Choosing the right credit card for your lifestyle

Credit cards can help you build a credit history and maintain a good credit score. Here’s how to find...

Benefits, fees, hidden perks: Choosing the right credit card for your lifestyle

News

RBC’s takeover of HSBC: What will happen to HSBC Canada customers?

HSBC Canada bank accounts, credit cards, mortgages and investments are moving to RBC. What steps should HSBC customers take...

RBC’s takeover of HSBC: What will happen to HSBC Canada customers?

Danica Nelson is a travel influencer who shares her money-saving travel hacks.

MoneyFlex

Travel hacks to help you save money on your next trip

Here are some ways Canadians can save money on travel for holiday vacations and beyond—including flight hacks, thrifty destinations...

Travel hacks to help you save money on your next trip

Young man works on his laptop at a European cafe

Travel

How to become a digital nomad—and not go broke

Want to work abroad as a Canadian? Flexible work arrangements and digital nomad visas have made this easier than...

How to become a digital nomad—and not go broke

A smiling young woman sits on a hotel bed, looking at her laptop

Credit Cards

National Bank of Canada World Elite Mastercard review

Find out if recent changes improve this champion travel credit card in our National Bank World Elite Mastercard review.

National Bank of Canada World Elite Mastercard review

Credit Cards

Is your credit card’s travel insurance enough?

Many credit cards offer travel insurance, but not all policies are created equal. Before you go on vacation, find...

Is your credit card’s travel insurance enough?

The one travel insurance clause you shouldn’t ignore

What does the * mean?

Comments Cancel reply

Related Articles

The best travel credit cards in Canada for 2024

How to stay on budget this summer, wherever your vacation plans take you

Alberta wildfires’ effects on tourism in Canada

No tickets for Taylor Swift in Toronto or Vancouver? See the costs of an international show

Benefits, fees, hidden perks: Choosing the right credit card for your lifestyle

RBC’s takeover of HSBC: What will happen to HSBC Canada customers?

Travel hacks to help you save money on your next trip

How to become a digital nomad—and not go broke

National Bank of Canada World Elite Mastercard review

Is your credit card’s travel insurance enough?