Barry Choi: Forget air passenger rights, get travel insurance

MoneyWise Canada
growing money

It’s good to know your rights, but that’s why travel insurance could save your vacation

Posted February 20, 2023 • Last updated 33 minutes ago • 5 minutes read

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Whether you’ve recently visited an airport or not, you’ve probably heard horror stories about major flight delays, lost luggage and (unplanned) overnight stays at the terminal. Amidst the chaos, many would-be travelers are better informed about their rights.

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Air passenger rights in Canada are designed to compensate consumers when their flights are delayed or their luggage is lost. According to the Canadian Transport Agency, travelers are entitled to a payment of up to $2,350 if their luggage is “damaged, delayed or lost” while traveling domestically or internationally. Passengers are also eligible for payments ranging from $125 to $1,000 if their flight is delayed more than three hours.

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However, you have to go through a lengthy process to make a claim, and the CTA website says it can take more than 18 months to review your complaint.

Rather than relying on compensation that may never come, travelers should consider purchasing extended travel insurance. Making a claim is easy and the payout you receive will be clearly outlined in your insurance policy. Because each type of insurance is different, you need to make sure you understand what you are entitled to.

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What is Extended Travel Insurance?

Extended travel insurance covers everything that is not medically related, such as: B. Hospitalizations. Although every policy is different, the most common types of extended travel insurance are:

trip cancellation: If you need to cancel your trip prior to departure, although this may be subject to conditions and designated “qualifying reasons”. The most common reasons are the loss of a job or a death in the family.
travel disruption: If you have a valid reason to return home early, you will be reimbursed for some of your non-refundable travel expenses.
flight delay: If your flight is delayed by a certain amount of time (depending on the policy), the flight delay insurance covers costs such as room and board.
Delayed or lost baggage: This insurance allows you to claim any items you need to purchase, such as clothing and toiletries, until you get your bag back.
Car Rental Collision/Loss Damage: This type of insurance covers damage or theft to rental cars, but does not come with liability insurance (which would help cover costs if you are sued for bodily harm).
Hotel/Motel Burglary: Any of your belongings stolen in a burglary can be claimed against your hotel/motel burglary insurance.
travel accident: If you suffer personal injury or accidental death while traveling, you or your beneficiary will be paid a lump sum.

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This is how travel insurance works

As with any insurance, you will only be paid out in certain situations. If you want protection with fewer conditions, you must purchase a policy that includes cancellation for any reason coverage.

Another example is flight delay insurance. Some policies may state that if you’re four hours late, you’re entitled to compensation. With this coverage, you could potentially book a meal and a hotel room (if you were delayed overnight) and then get reimbursed. Be sure to keep receipts and also be aware of the sum insured.

When you apply for flight delay insurance, your insurance provider wants an official notification from your airline that your flight was delayed. A screenshot of your updated boarding pass would probably suffice. If your insurance is through your credit card, you will likely need to provide the statement that your credit card was charged for your flights and hotels.

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How much does extended travel insurance cost?

How much you spend on travel insurance depends on where you buy your insurance, your age, the value of your vacation and the length of your trip.

Generally, if you are under 65 and have no pre-existing medical conditions, a multiple trip annual premium policy will cost you about $250. This would cover both travel medical insurance and extended travel insurance for any trips you take throughout the year. If you’re looking to get travel insurance, you should do some research. Some of the most popular options are TuGo, BMO, and Manulife.

It is also possible to take out free travel insurance via your credit card. Many premium travel credit cards offer a comprehensive travel insurance package. The catch is that you have to charge your card for a certain amount of your travel expenses – e.g. B. 75 percent – for your policy to be valid.

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These rules can be a bit tricky if you use points to pay for your trip. Insurance policies usually state that you must pay any outstanding balances with a credit card that earns the same points in order for your insurance to be valid. In most cases, this is not a big deal for consumers. However, it could be a problem if you’re redeeming points but don’t have a credit card that earns the same currency and offers travel insurance.

Note that if your credit card offers travel medical insurance, you do not need to charge your card for your flights and/or hotels in order for your policy to be valid.

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Travel insurance alternatives

In addition to travel insurance, there are a few ways to protect yourself if you are unsure about your travel plans.

Booking fully refundable hotels and flights is one way to make things foolproof. This can be better than travel insurance as you can cancel at any time and get a full refund. However, you pay a premium for this privilege, and it won’t help you if your luggage is delayed or your belongings are stolen from your hotel.

Some tour operators and resorts also offer their own type of insurance. For example, Air Canada Vacations has an optional CareFlex plan starting at $69. If you take out this insurance, you can change your dates, transfer your package or cancel with a full refund up to 21 days before departure. Alternatively, you can receive travel credit up to three days before departure.

Some people may think that travel insurance is an unnecessary expense. However, as with any insurance policy, if you ever have to make a claim, you’ll be glad you have it.

This article is informational only and should not be construed as advice. It is provided without any guarantee.

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