Is Travel Insurance Worth It for Canadians? Pros and Cons Explained

arafaaFebruary 7, 2025

0 116 4 minutes read

Traveling is an exciting way to explore new places, experience different cultures, and create lasting memories. However, unforeseen events—such as medical emergencies, trip cancellations, or lost luggage—can turn a dream vacation into a stressful ordeal. For Canadians, travel insurance offers a safety net against these risks, but is it really worth the investment? In this article, we’ll break down the pros and cons of travel insurance to help you decide whether it’s right for your next trip.

1. What Is Travel Insurance?

Travel insurance is a type of coverage designed to protect travelers from financial losses caused by unexpected events during their trips. Policies can vary widely in scope, but most include some combination of the following:

Medical Coverage: Emergency medical expenses, hospital stays, and evacuation.
Trip Cancellation/Interruption: Reimbursement for non-refundable bookings if your trip is canceled or cut short.
Baggage Loss/Delay: Compensation for lost, stolen, or delayed luggage.
Accidental Death and Dismemberment: Financial protection for serious accidents.
Travel Assistance Services: 24/7 support for emergencies like legal issues or passport loss.

In Canada, provincial healthcare plans provide limited coverage outside the country, making travel insurance especially important for international trips.

2. Why Do Canadians Need Travel Insurance?

While Canada’s universal healthcare system ensures access to medical services at home, its coverage abroad is minimal. Here’s why travel insurance is crucial for Canadians:

a) High Cost of Medical Care Abroad

Medical treatment in countries like the United States can be astronomically expensive. For example:

A broken leg could cost $5,000–$10,000.
An emergency room visit might run $1,000–$3,000.
Hospital stays can exceed $10,000 per night.

Without travel insurance, you’d have to pay these costs out-of-pocket.

b) Limited Provincial Coverage Outside Canada

Provincial health plans (e.g., OHIP in Ontario) typically cover only a small portion of medical expenses incurred abroad, and only for emergency care. Many treatments, medications, and follow-up visits are excluded.

c) Unpredictability of Travel

Even the best-laid plans can go awry. Whether it’s a sudden illness, natural disaster, or airline strike, travel insurance provides peace of mind knowing you’re protected.

3. Pros of Travel Insurance

Here are the key benefits of purchasing travel insurance:

a) Medical Emergencies

Coverage for Unexpected Illnesses or Injuries: Travel insurance pays for doctor visits, hospital stays, surgeries, and prescription medications while abroad.
Emergency Evacuation: If you need to be airlifted to a nearby hospital or repatriated to Canada, travel insurance covers these often-expensive services.

b) Trip Cancellations and Interruptions

Life is unpredictable, and sometimes plans change. Travel insurance reimburses non-refundable expenses if:

You or a family member falls ill before departure.
A natural disaster affects your destination.
Your flight is canceled due to unforeseen circumstances.

c) Lost, Stolen, or Delayed Luggage

If your luggage is lost, stolen, or delayed, travel insurance compensates you for essential items and helps recover your belongings.

d) Peace of Mind

Knowing you’re financially protected allows you to focus on enjoying your trip without worrying about “what ifs.”

e) Affordable Premiums

Compared to the potential costs of medical emergencies or trip disruptions, travel insurance is relatively inexpensive. A typical policy might cost $50–$150 for a one-week trip, depending on factors like age, destination, and coverage level.

4. Cons of Travel Insurance

While travel insurance has many advantages, there are also drawbacks to consider:

a) Exclusions and Fine Print

Policies often come with exclusions that limit coverage. Common examples include:

Pre-existing medical conditions.
High-risk activities like skydiving or scuba diving.
Trips booked after a storm or pandemic warning was issued.

Failing to read the fine print can lead to denied claims.

b) Overlapping Coverage

Some credit cards and employer benefits offer basic travel insurance. If you already have overlapping coverage, purchasing additional insurance may be unnecessary.

c) Claim Denials

Insurance companies may deny claims if you fail to disclose relevant information (e.g., pre-existing conditions) or don’t follow policy guidelines (e.g., seeking immediate medical attention).

d) Cost Adds Up

For frequent travelers, the cost of buying individual policies for each trip can add up quickly. Multi-trip annual plans are available but may still feel pricey.

5. Who Should Buy Travel Insurance?

Not everyone needs travel insurance, but certain groups benefit more than others:

a) Older Adults

As we age, the likelihood of medical emergencies increases. Travel insurance is particularly valuable for seniors, who face higher healthcare costs abroad.

b) Frequent Travelers

If you travel regularly, investing in an annual multi-trip policy can save money and simplify planning.

c) Adventure Seekers

If your travels involve high-risk activities like skiing, rock climbing, or bungee jumping, specialized travel insurance ensures you’re covered.

d) International Travelers

Traveling outside Canada exposes you to significant financial risks, making travel insurance essential.

e) Those with Pre-Existing Conditions

While pre-existing conditions often require special endorsements, having coverage tailored to your health needs is critical.

6. Alternatives to Traditional Travel Insurance

If traditional travel insurance doesn’t suit your needs, consider these alternatives:

a) Credit Card Benefits

Many premium credit cards offer complimentary travel insurance when you book trips using the card. Be sure to review the terms and limitations.

b) Employer or Group Plans

Some employers provide travel insurance as part of employee benefits. Check with your HR department to see what’s included.

c) Provincial Health Plans

While limited, provincial health plans do offer some coverage abroad. Supplement this with private insurance for comprehensive protection.

d) Self-Insurance

For low-cost domestic trips or individuals with substantial savings, self-insuring (paying out-of-pocket for emergencies) might make sense. However, this approach carries significant financial risk.

7. Tips for Choosing the Right Travel Insurance

To maximize the value of your travel insurance, keep these tips in mind:

a) Assess Your Needs

Determine which types of coverage matter most based on your destination, activities, and health status.

b) Compare Policies

Shop around and compare quotes from multiple providers. Look beyond price and evaluate coverage limits, exclusions, and customer reviews.

c) Read the Fine Print

Understand what’s covered—and what’s not—before purchasing a policy. Pay close attention to exclusions related to pre-existing conditions and high-risk activities.