Factors That Impact Travel Insurance

While many people understand that they should invest in travel insurance before embarking on a trip it can be confusing to figure out what exactly is covered. Different factors can determine how much coverage you need, as well as causing the price you pay to rise or fall.

Perhaps this confusion is why only 47% of Canadians always purchase travel insurance, with the majority being 55 or older, according to survey by the Travel Health Insurance Association of Canada (THiA).

We decided to take an in-depth look at all of the different elements that can affect your travel insurance, as well the varying extent to which these will benefit or hinder your wallet.  

Pre-existing Medical Conditions

This is the big one, and the determining factor that most people are aware of. In basic terms, a pre-existing medical condition is any physical illness, injury or condition known about and diagnosed prior to taking out your insurance policy.

The theory is that travellers with a pre-existing condition are more likely to file a claim, and thus may have to pay a higher premium. There is no age limit on minimum or maximum coverage when it comes to pre-existing conditions, and it is vital that they are declared.  

Yet, despite the implications that can come from withholding a pre-existing condition, a 2013 survey by THiA, found that 14% of people have deliberately provided inaccurate health information on travel insurance applications to receive a lower rate, while only 33% of people have actually reviewed medical forms with a physician.

If undeclared, this is classed as fraudulent and can void your policy.

Usually if you list a pre-existing condition up front, or are over a certain age, you will be asked to fill out a survey to outline your medical history. Listed conditions vary from breathing problems and diabetes, to cancer treatments and heart conditions. If the worst comes to the worst and you find yourself faced with a costly medical procedure linked to a pre-existing condition, your insurer should pay your expenses upfront, so long as you outlined the condition in advance. Always remember to consult with your doctor of physician if you have any doubts or uncertainties about a pre-existing condition.

You should note that if you are injured or require medical treatment for something that is deemed ‘your fault’- i.e. while intoxicated- your medical insurance probably wouldn’t pay out.

Age Of Travellers

When it comes to the world of insurance medical conditions and age seem to go hand in hand. Since older travellers are deemed more susceptible to illness and injury, unfortunately prices do increase with age.

For the most part insurers tend to categorise age into bands- with the under 60s paying the lowest fee. If there are no additional factors, those aged 60-65 will see a slight increase in payables but nothing to write home about. It’s the 75s and over who should expect to see premiums increase significantly.Costs will vary company to company, so it’s best to search around and compare policy premiums.

Length Of Trip

The theory is that the longer you are away, the greater the probability that you will fall ill or become injured during this time. Therefore the longer the trip, the more expensive the premium will be.

It is vital that no matter how long or short your trip is, you take out an appropriate insurance plan. Companies can cover you from as little as one day right up to 212 days for a single trip policy, depending on your province. Say you’re spending the year backpacking Asia or interrailing in Europe, you’ll need more extensive coverage. Luckily many companies can cater for this with either a multi-trip policy or a longer single trip plans.

Time Sensitivity

Sometravel insurance providers offer some additional benefits for customers who pay for their policy within the first 10-30 days of booking it, which is a great excuse to invest sooner rather than later. For the most part, travellers who book in advance will find two main time-sensitive benefits: ‘cancel for any reason’ and a ‘pre-existing condition waiver’.

Trip destination

Travel insurance can be more or less expensive depending on the countries you are travelling to, but only in a broad way. More often than not, travel insurance is determined by whether you are travelling domestically or internationally.

Domestic travel

Whether you’re heading out of provincefor a cosy, cottage weekend, or flying to the East Coast for a business trip, travel insurance might not be the first thing you think of.

It is, however, important even when travelling within Canada. Your provincial health care might not cover for all possible scenarios once you leave your home province, and it is important to make sure you are covered for all medical emergencies- plus any unexpected cancellations or baggage losses. In the grand scheme of things, domestic travel insurance premiums will likely be lower than international coverage.

International travel

Although it might seem logical that the further away, or less stable a country's healthcare infrastructure is, the more expensive an insurance premium will be. However, this is not necessarily the case.

Travel advisories

Destination can affect your insurance premium when travel advisories come into play.

A travel advisory contains official information from the Government of Canada that helps to warn Canadians of any unsafe regions where extra safety and precaution is needed. The Global Affairs Canada Travel Information Program collects safety and security data from regions around the world and determines the level of threat a given location can pose to Canadians traveling there. Events that can instigate an advisory include everything from terrorist threats and political instability, to natural disasters and health emergencies.

The best thing to do in advance of your trip is to stay up to date with travel advisories- the Government of Canada offers a free travel safe app.

Policy Maximum

The policy maximum is the maximum amount the plan will pay out in benefits. Many insurers offer different levels of coverage, based on some of the above factors, for a customer to choose from. The higher the coverage maximum you choose, the more expensive your insurance premium will be initially- but note this could save you money in the long run.

Coverage Type

There are two main types of coverage usually listed with an insurer: All Inclusive or medical only.

Since all inclusive policies provide more coverage, naturally they will set you back a little more. Medical will only have you covered for emergency medical care.

Alternatively you can tailor your coverage to match the specifics of your trip with a package plan. In addition to your emergency medical care; you can also pack in some extra coverage such as trip cancellation or baggage loss coverage.

Some package plans include kids for free, which means a better price value for parents and grandparents traveling with kids. As you might imagine, the more things you add on, the more the cost will grow- as they say: “you get what you pay for.”

Additional boosters

There are a number of additional things you can bundle with you coverage plan as an extra precaution. These can be based on the reputation of the place you are visiting, or if you are considering an adventure holiday.

Hazardous sports coverage

It doesn’t matter if surfs up in Cali or you’re hitting the slopes in Chamonix; if you’re engaging in any kind of extreme sport you should check your policy to see of any exclusions for certain activities. Regular emergency medical care just won’t cut it because of the heightened risks that come with extreme sports, including:

  • Canoeing and kayaking

  • Ice skating

  • Parasailing

  • Sailing

  • Scuba diving

  • Skiing and snowboarding

  • Skydiving

  • Surfing

  • Tobogganing

  • Tubing

  • Water Skiing or wakeboarding

  • White water rafting

  • Windsurfing


Rental car coverage

How auto insurance works when you’re renting a vehicle in another country can be a little confusing and vary depending on where you are visiting.
Some Canadian companies will offer a rider for rental cars in the United States or Mexico, which is often a lot cheaper than purchasing insurance from the rental company. Generally this will cover you for everything from breakdowns and collisions, to theft and extreme weather damage. Much like regular auto insurance, however, while the car rental insurance will reimburse you for the cost to repair the rental car if it’s broken into, it will not cover items inside the vehicle.

Things get a little more complicated once you venture outside of North America, and it’s unlikely that your domestic insurer will be able to offer the same rider for places where driving conditions vary (think driving on the opposite side of the road, different highway rules etc).

Identity theft protection

We’ve all heard horror stories about friends of friends who have been enjoying an exotic excursion when they receive a phone call from their bank saying their card has been duplicated, or they drop their passport and never seen again. Specialist coverage from some insurers can help mitigate the damage caused by identity theft. Once its been confirmed that your identity has been compromised your insurer can help with contacting law enforcement, helping with paperwork and filing documents.

The policy you take out may also include the insurer refunding the cost of issuing any new emergency identification such as passports.

Cancel for any reason coverage

This coverage is one of the newest additional extras to enter the travel insurance market and empowers travellers to cancel trips for any reason up to two days prior to departure. In most cases, however,  insurers will usually ask that you purchase this as soon as you can once your trip has been booked.

Taking out a travel insurance policy is only half of the battle. It is vital that you understand each section within your policy, and know what you are covered for, just in case you do run into any trouble. Different insurers can cater for different needs, so compare the plans available to you and speak directly with your chosen insurer.