What is Travel Insurance & Is it Necessary?

From hiccups to emergencies: How travel insurance makes a difference

One of the great things about travelling with a travel insurance plan is how flexible they are. From lost baggage to emergency medical expenses, the right plan can help you cover your bases. Whether you're planning a month-long surf trip through Western Australia, a half-day shopping trip to Buffalo, or attending a sales conference in Berlin, travel insurance can add a layer of security you can rely on while away from your home province or country.

Let's take a look at a few scenarios where travel insurance might come in handy.

Unexpected medical emergency

You head up the chairlift for one last run at an incredible ski destination. It's been a gorgeous day, but you slip getting off the chairlift and break your leg at the top of the mountain. Now what? 

Depending on how bad the break is, you might be looking at a helicopter ride to the nearest hospital for surgery. Without the right travel insurance plan that may help cover the costs, this would be an expensive incident. 

Lost hotel and excursion reservations due to travel delays

You land for what is intended to be a quick stopover to change planes. Upon landing however, you learn over the intercom that your connecting flight has been cancelled, and you'll need to stay and fly out the next morning. The problem? You’ve already prepaid for the hotel at your final destination, which means you’ll lose out on the money you’ve paid. Now what?

If you’ve chosen a travel insurance plan that includes trip interruption insurance, your insurance company may reimburse you for the lost night at the hotel, along with other costs you might incur during your delay–meals, transport, etc. Sure, the delay is still annoying, but at least you aren’t out of pocket on top of it.

What does travel insurance cover?

In the same way that no two trips are alike, there is no one-size-fits all travel insurance plan. Rather, travel insurance allows for a range of customizable options that reflect the purpose and duration of your trip, or the parts of it you’d like covered. 

For example, most insurance companies will give you the option of choosing a plan that covers a single trip, or multiple trips in a year. (A multi-trip plan.) For a one-off vacation, a single trip will usually be your best bet, while frequent travellers, such as business travellers, might opt for a multi-trip plan. 

Other additional types of coverage you might add to a travel plan might include:

1. Trip delay

Coverage that is intended to reimburse you for costs resulting from delayed flights, transfers or other forms of transportation.

2. Trip cancellation insurance

Trip cancellation coverage is designed for pre-departure situations that require you to cancel your travel plans. For instance, if you face a sudden illness, this coverage can help you recover costs for prepaid flights, hotels, and other bookings ^{footnote 11}.

3. Trip interruption

Trip interruption insurance is designed to help protect you if unexpected events arise after your departure, forcing you to cut your trip short or delay your return ^{footnote 11}.

4. Travel medical

Coverage that helps pay for medical emergencies while outside of your home province or territory of residence, or out of country ^{footnote 11}. Here are some examples of what may be included under this type of coverage:

• Emergency treatment: lab tests, x-rays, prescriptions, diagnosis, and more.
• Hospital stays
• Land or air ambulance
• Emergency dental care

Keep in mind that travel insurance covers sudden and unforeseen medical emergencies. It does not cover things such as routine check-ups, non-emergency or elective treatment and unstable pre-existing medical conditions.

5. Baggage delay

Coverage that is intended to help reimburse the cost of replacing items such as clothes, toiletries and other necessities, while you wait for baggage that’s been delayed ^{footnote 11}.

6. Lost or damaged baggage

Coverage that is intended to help reimburse you for lost or damaged items if your luggage is misplaced or damaged while in the care of an airline, railway or other form of travel carrier ^{footnote 11}.

Types of travel insurance plans

Travel insurance is often bundled into plans that cater to the needs of different types of travellers. Common options include single trip, multi-trip, and top-up insurance plans.

Single trip travel insurance plans

Single trip insurance provides coverage for one specific trip. It’s perfect for infrequent travellers planning an upcoming vacation. These plans offer flexible coverage options, such as emergency medical protection or trip cancellation, depending on your needs.

Multi-trip travel insurance plans

Multi-trip insurance is great for frequent travellers and is often a cost-effective choice. It covers multiple trips within a one-year period and offers varying levels of coverage tailored to individual preferences.

Top-up travel insurance

If you already have some travel coverage through your credit card or existing insurance plan, you might want to double-check the details to make sure you’re covered. Many basic plans leave coverage gaps (like the number of days you’re away), which could lead to unwanted surprises when travelling. Top-up travel insurance helps address those gaps, allowing you to purchase only the additional protection you need.

What’s not covered by travel insurance?

As important as it is to be savvy when travelling, it’s also important to understand that travel insurance won’t cover you for everything. In fact, there are a number of common limitations you’ll want to be aware of.

A few examples of common scenarios that aren’t typically covered include:

Negligence: This includes travel disruptions that were within your control, for example, missing a flight because you slept through your alarm.

Pre-existing medical conditions: Most travel insurance plans exclude coverage for unstable pre-existing medical conditions. Before you buy a travel insurance plan be sure to review the pre-existing exclusion to see how it might apply to you.

Pregnancy: If you will be travelling when pregnant, make sure to check the plan limitations and exclusions with respect to pregnancy.

Severe weather advisory: Travelling while under a severe weather advisory? For example, if you’re headed to Florida at the same time a hurricane is expected to make landfall, your plan might not cover you. It’s a best practice to keep up to date on Government of Canada travel advisories before travelling.

War or civil unrest: Most plans will also refuse coverage if you travel to a warzone, or other areas known for political or civil unrest. If you're unsure about the region you’re travelling to, the Government of Canada posts up-to-date travel advisories for every country on the planet.

Reasonably foreseeable event: This would include events you expect to happen before your trip takes place. For example, booking a trip after an airline announced a threat of strike, or a government issued travel alert.

Other items to watch for: In addition to all the above, many travel insurance plans limit coverage for accidents caused by some high-risk activities like skydiving or helicopter skiing.

How much is travel insurance?

Depending on the plan you choose, the price you’ll pay may vary depending on a few variables. To get a quote, you’ll be asked a series of questions that might include:

• Your age and current state of health 
• The duration of your trip
• Where you’re travelling to
• The type of coverage you’re looking for (medical, trip delay or cancellation etc.)
• The number of travellers in your party

As a rule of thumb, the average cost you can expect to pay might be in the ballpark of 4 - 12% of the cost of your total trip. And sure, no one wants to add extra costs to an already expensive vacation, but, when weighed against the costs of a medical emergency or cancelled flight, a travel insurance plan makes good financial sense.

How to choose the best travel insurance for your needs

Whether you’re embarking on a solo backpacking trip around Europe, or a weekend in Las Vegas, there are a number of key factors you’ll want to assess before buying a travel insurance plan. For example:

• Does your plan have a deductible? If so, what is it?
• Does the plan offer continuous coverage for the length of your trip outside of your home province or country?
• Does the plan limit coverage for certain regions or activities? (I.e. Mountain climbing, scuba diving or extreme sports)
• Does the insurance company offer 24/7 global emergency support? 
• Can the coverage be renewed while you’re out of province/country?
• Does the plan cover hospitalization for illness or injury and related medical costs?
• Do you have to pay any bills you might incur up front? Or does the plan pay them?
• From provider to provider, travel insurance plans all have their own offerings and limitations, so it’s important to do as much research as you can, before committing.

Credit card travel Insurance vs. stand-alone travel insurance

While it is true that many travel credit cards offer travel insurance in some form or another, they might not provide the coverage you need for an upcoming trip. Your card’s plan might only cover shorter trips, provide limited medical coverage or come with other limitations.

What’s more, credit card travel insurance plans usually offer standardized coverage only.  While stand-alone travel insurance offers more fulsome and customizable coverage options for things like longer trips, higher emergency medical coverage maximum, trip cancellation, etc.

Both embedded and stand-alone coverage are not mutually exclusive. If you already have a credit card with travel benefits, make sure to check if there are any gaps (day limits, benefits) and if there are, you may use stand-alone to top-up your coverage.  

How to get travel insurance through BMO

Travel is a rewarding way to expand your horizons, and travel insurance is a great way to stay protected while doing it. Remember, no two plans are alike so take care to find a plan with coverage for every detail that’s important to you, from emergency medical to flight delay.

If you're considering BMO for your travel insurance needs, a helpful starting point is to explore our range of travel insurance plans.

For more information or to purchase coverage, getting a quote online is quick and easy. If you prefer the assistance of a BMO travel insurance expert, call 1-800-661-9060.