Travel insurance isn’t perfect, but it’s peace of mind

With all the chaos in air travel, Santa might be the only person taking to the skies this holiday season who won't need travel insurance—but assuming you don't have your own flying reindeer to keep you on schedule, you might be wondering if it's worth adding travel insurance to your holiday bookings. 

Driving the news: With the holiday season coming up quickly and most pandemic-era restrictions lifted, Canadians are expected to travel in record numbers. 

That likely means airport lineups, delays, and cancellations—but do you really need to buy insurance for your holiday? I'll be visiting family abroad over Christmas, so I ran some numbers myself. Let's break down the costs and what's covered. 

Comprehensive travel insurance will cost me $297. It will cover me in the case of a medical emergency or accident, which can get expensive. A one-day stay at a US hospital can total $10,000. 

  • It covers any cancelled or delayed flights and related expenses incurred, like a night in a hotel I've already pre-paid.

  • It also provides compensation for lost or delayed baggage. 

  • Being a fully vaccinated traveller, I'm covered for COVID-19-related expenses up to $5 million.

Bare bones trip cancellation protection will cost me $108. I'll be reimbursed up to $20,000 for any pre-paid, non-refundable costs associated with a delayed or cancelled flight, but it offers no healthcare coverage. 

  • It still applies to COVID-related cancellations, but not all policies do.

And keep in mind your credit card might cover you. If you're taking off for a lazy beach vacation, insurance offered through a travel rewards credit card is probably sufficient, but not if you’re scaling Everest. Read through your cardholder benefits guide to find out what's offered.

Before you pick a policy, read through the fine print and avoid insurance gotchas:

  • Cancellations: Each policy will have its own "acceptable" reason for cancellations. If you're booking a trip, you're not 100% about opting for a "cancel for any reason" (CFAR) policy might be wise. 

  • Pre-existing conditions: Travel health insurance is like standard insurance because you need to disclose your health status, which might bump up the price. However, not reporting accurately could see your policy made null and void.

  • Filing a claim: Find out if your coverage is primary, meaning you file a claim directly with your insurer or secondary, in which you would have to file a claim with a third party, like an airline, first.

Bottom line: Travel insurance provides peace of mind but at a price, so make sure you shop for the best policies. Once you find one that suits your needs, read through the fine print to understand what's covered.