Travel insurance provides financial protection for medical emergencies, trip cancellations, delays, lost baggage, and more. Trip protection is usually offered by airlines or booking websites and typically only covers limited cancellation scenarios or provides travel credits instead of comprehensive insurance. In this article, we’ll look at travel insurance and trip protection so you can make an informed decision. Importantly, understanding the Difference Between travel insurance and trip protection will help you determine which coverage suits your needs.
Why Is Travel Insurance Important?
In most cases, Canadians will travel with some safety. This safety can be either provincial health coverage or simple credit card travel insurance. However, many don’t realize that these coverage options may prove insufficient when a claim is actually made.
Unfortunately, provincial health plans offer very little coverage outside of Canada. If you’re hospitalized outside the country, such as in the U.S., your province may reimburse a low, flat daily rate. Unfortunately, this is nowhere near what American hospitals charge. A single night in a U.S. hospital could cost a person upwards of $10,000 after an accident. In this context, it’s easy to see the importance of understanding the difference between travel insurance and trip protection before your trip.
Credit card travel insurance is indeed better than nothing. However, people using it need to keep in mind that it comes with strict conditions. For example, trip lengths are often capped at 14-21 days. On top of this, age limits may apply, and pre-existing conditions are frequently excluded. Many cardholders are generally unaware that their coverage has lapsed until it comes time to file a claim. This results in many Canadians travelling without realizing they are underinsured.
What Are The Different Types Of Travel Insurance?
Feature | Comprehensive Travel Insurance | Trip Cancellation Insurance | Trip Protection |
What is the primary purpose? | Medical emergencies, mass evacuation, trip disruptions | Reimbursements if trip is cancelled before departure. | Provides limited flexibility with no medical coverage |
What is the scope of coverage? | Broad | Narrow | Very limited |
Is it a regulated product? | Yes | Yes | No |
What type of payout? | Cash reimbursements | Cash Reimbursements | Travel credits, vouchers or fee waivers |
Is there medical coverage? | Yes | No | No |
What is typically covered? | Illness, emergencies, travel advisories, trip delays | Illness, job loss, family emergencies | Restricted |
Who sells it? | Licenced insurers, banks and brokers. | Insurers and credit card companies | Airlines, cruise lines, booking sites |
What is it best for? | Full protection | Protecting large upfront trip costs | Basic flexibility |
What Does Comprehensive Travel Insurance Cover?
Your average comprehensive travel insurance policy will bundle everything together, providing you with coverage for cancellations, trip interruptions, and medical expenses. There are sometimes additional perks that come with comprehensive travel insurance, as well. This includes:
- Flight accident insurance
- 24/7 emergency services
- Coverage for pet fees
- Personal liability protection
At the end of the day, this will offer the best value and peace of mind. This is especially the case for those taking longer or more expensive trips. With comprehensive travel insurance, you won’t have to worry about purchasing separate coverage or about coverage gaps.
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What Does Trip Cancellation Insurance Cover?
Trip cancellation insurance will only reimburse you for prepaid, non-refundable travel expenses. These must be cancelled before you leave on your trip or holiday. The list of covered reasons is still much broader than your average trip protection coverage. Some common coverage includes:
- Sudden illness or injury to yourself
- Sudden illness or injury to a family member
- Death of a family member
- Job loss or work obligations
- Canadian government travel advisories
- Visa denials or denials at the border
- Weather events or other natural disasters.
What Does Airline Trip Protection Cover?
When you book a flight or hotel through an online travel site, you’re likely going to be offered protection at checkout. When purchasing, it’s worth reading the fine print with caution. In many cases, trip protection will serve only as a narrow safety net and, more often than not, will include large holes or coverage gaps. For reference, comparing travel insurance vs trip protection clarifies which one offers more substantial coverage.
It is important always to remember that trip protection does not equate to travel insurance. Instead, trip protection is a cancellation policy offered by the travel company. In many cases, it excludes many common and unforeseen reasons your trip may be cancelled or disrupted. Though this may sometimes include medical emergencies, it won’t include situations such as job loss. In the event you need to cancel your booking, trip protection may:
- Refund a portion of your costs (rarely all of it)
- Issue travel credits instead of a cash refund
- Only cover expenses that are prepaid and non-refundable
It is always recommended that you take the extra step in protecting your trip with legitimate travel insurance. Ultimately, understanding the difference between travel insurance and trip protection can help you gain greater peace of mind for your journey.
Choosing The Right Travel Insurance Policy
Picking the right travel insurance policy does not have to be complicated. As with any insurance policy, you’ll want to take your time and not rush into one. Let’s take a look at some tips for securing the right travel insurance policy.
- Trip Cost: If you’ve paid $10,000 in non-refundable flights and hotels, trip cancellation coverage should be a no-brainer. If your trip is generally refundable and free of charge, you may prioritize medical coverage instead.
- Trip Destination: If you’re staying within Canada, your health card will mainly have you covered for medical expenses. If you are heading to the U.S. or somewhere else across the border, you may want to look into medical coverage.
- Who are you travelling with? If you are travelling with friends or family, things may be a bit more complex. It is recommended that you ensure everyone is covered under the same policy in case someone needs to cancel.
- Consider your health: If you have pre-existing health conditions, it’s recommended that you search for policies that offer stable condition coverage. Make sure to read the stability clauses carefully!
Travel Insurance Vs. Trip Protection: Frequently Asked Questions
Is trip protection the same as travel insurance?
No. Trip protection is usually a limited cancellation benefit offered by airlines or travel booking companies. Travel insurance provides broader coverage, including emergency medical expenses, trip interruption, baggage loss, and more.
Is trip protection worth it?
Airline trip protection may be worthwhile if you’re only concerned about cancelling your flight. However, it generally doesn’t include emergency medical coverage or many unexpected situations covered by travel insurance.
Do Canadians need travel insurance?
Although provincial health insurance provides some coverage, it is usually very limited outside Canada. Travel insurance can help cover emergency medical expenses, cancellations, delays, and lost baggage while travelling abroad.
Does travel insurance cover pre-existing conditions?
Some policies do, but most require your condition to be stable for a specified period before your departure. Always read the policy wording carefully.
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Travelling should be about making memories, not worrying if you’re protected. By understanding the difference between travel insurance and trip protection, you can get coverage that matches both your needs and travel plans.
For those still unsure, reviewing travel insurance vs. trip protection will help you make the best decision. Remember, if you are in the market for a new travel insurance quote, don’t hesitate to reach out to us at isure today!
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