While it may only be a small part of your business, travel coverage is as essential to your client’s trips as plane or train tickets, hotel reservations and luggage. Even if a client intends only to travel within Canada or make brief forays into the U.S. for cross-border shopping, heading out without proper coverage means gambling with his or her life savings.
With the arrival of spring, your clients are probably planning summer road trips. Now is the time to talk about travel insurance with them.
Many Canadians don’t pack travel insurance for their trips within Canada. This can be an expensive oversight. An RBC Insurance/Ipsos-Reid survey shows that 65% of Canadians who travel within Canada but outside their home province never purchase travel insurance for these trips. Canadians travelling internationally, on the other hand, are better prepared.
David Redekop, principal research associate at the Conference Board of Canada in Ottawa, says the board’s annual surveys have consistently shown in recent years that about 90% of people age 65 and over are covered in some manner – often by purchasing insurance through employers or credit cards – for trips abroad.
The Travel Survey of Residents of Canada, sponsored by Statistics Canada, the Canadian Tourism Commission and the provincial governments, found that in 2006 (the most recent year for which data is available) Canadians took 19.6 million trips from province to province.
"Injuries, illnesses, accidents and lost luggage can happen regardless of your destination," says Stan Seggie, president and CEO of RBC Insurance’s travel division in Toronto. "Many Canadians assume they’re covered under their provincial health plans. But provincial plans and employee health plans are not designed to cover everything and may limit reimbursement."
Basic emergency medical costs, including hospital stays in other provinces, are covered up to the home province’s maximum fee schedule. But, if your client falls ill in another province with higher rates, and on top of that specialists are called in, the home province may not cover the difference.
A big area of concern is ambulance transport, both ground and air. Canadians are only covered for this in their home provinces, and ambulance bills could be a huge expense if your client is injured or falls ill in rural areas of our vast country, Mr. Seggie notes. "We get quite a few out-of-province claims every year, often skiing accidents," he says. "A person injured in a ski accident at Mount Tremblant, Que., would pay about $250 to be taken by ambulance to hospital in St. Jovite, a 20-minute drive away. If a client is injured at Whistler, he or she would be taken by air ambulance to hospital in Vancouver, which would cost between $26,000 and $28,000."
X-rays, crutches and prescription drugs may not be covered by the home province. "X-rays will set you back a couple of hundred dollars," Mr. Seggie says. "Add $40 for crutches and the $250 ambulance bill, and it adds up to a fair bit."
Coverage for prescription drugs purchased outside the home province is a patchwork quilt across the country. It varies from provinces and territories that will reimburse the cost, those that will reimburse only up to their maximum rate, those that may reimburse and those that won’t.
Robin Ingle, president of Ingle International and Imagine Financial in Toronto, says in the past he didn’t push travel insurance for trips within Canada. "But I’ve been hearing about people paying $15,000 when they have accidents outside their home province, so now I recommend in-Canada travel insurance because many clients aren’t aware that they need it. An agent can easily find these products at all the major insurers."
Coverage is inexpensive. Under RBC’s Travel in Canada plan, for example, the cost of insuring a 65-year-old on a 10 to 16-day trip with a value of $1,000 would be $94. The same person who insures a five to nine-day trip with a value of $1,100 would pay $81. The plan covers trip cancellation and interruption, flight accident, travel accident, medical emergency, and baggage and personal effects. Coverage is available for people up to age 84, and does not require a medical questionnaire.
"The premiums are so inexpensive that many insurance professionals regard this as a very small part of their business," Mr. Ingle notes. "But it’s a nice add-on product that earns trust and helps cement the client relationship. It’s so easy for agents and brokers to get disintermediated today with all the other insurance channels being created that cut them off from the client."
He adds that many insurers are more relaxed about pre-existing medical conditions for in-Canada coverage, because at least part of the medical bill would be picked up by the home province. By contrast, your client will need to disclose all serious medical conditions when applying for coverage outside Canada. Many in-Canada plans don’t have medical questionnaires, but Mr. Ingle says most companies that do will use a standard stability clause that says the client’s medical condition has been stable for a certain length of time and that the individual is not travelling against a physician’s advice."
Another concern is that your clients may cross into the U.S. on their trips, forgetting they are not insured for medical emergencies outside Canada. Because of the proximity to the international border of many Canadian cities and travel destinations, shopping opportunities and shorter routes may make it tempting to cross into the US Statistics Canada reports that overnight travel by Canadians to the U.S. reached 4.5 million trips in the 2007 third quarter, the highest level in 15 years. And Canadians’ same-day car travel to the U.S. reached 6.1 million trips in that period for the first time since the events of Sept. 11, 2001.
You’ll need to warn your clients that it isn’t worth exposing themselves to illness or injury south of the border, even if they’re just shopping for an afternoon in Plattsburg, N.Y., Buffalo or Seattle.
Mr. Ingle mentions a friend who suffered a heart attack on an airplane stopover in the U.S. "His hospital stay cost US$30,000," he says. "A week’s stay can set you back US$60,000 or more."
"For a night or two, many travellers deem it an acceptable risk to visit the U.S. without insurance," Mr. Redekop says. "They don’t realize it could cost them their homes if, say, they have a road accident and are seriously hurt. Older people, especially, may have more time and money to travel, but their days of generating income are over. They need to protect their assets."
Before they hit the road this summer, have your clients look into the wide array of annual medical plans that provide coverage outside Canada. Most require medical questionnaires so make sure the client understands the importance of full, accurate medical disclosure. An incomplete or inaccurate application is a "material misstatement," which gives the insurer the right to turn down a claim.