I get a lot of questions about travel-related insurance. Most of the time, these questions are about pre-existing conditions, and whether or not an individual qualifies for coverage while they are away.
However, lately I have had inquiries that come from a different perspective. And my responses usually reference what is clearly not covered, according to various insurance documents.
Given the legalese that is built into the actual policies, sometimes not even another lawyer is willing to give an opinion with absolute certainty. So how are we, as ordinary readers, supposed to come to a conclusion and feel secure enough in how we have defined specific phrases?
On the other hand, there are some clear no-no's.
QUESTION: I understand there is a new entertainment option in Florida that includes driving a NASCAR car around a regulation oval track several times. I assume they take all kinds of precautions, but should I be hurt in an accident while participating in this activity, would I still have full coverage?
ANSWER: Not only would you not have full coverage, it's unlikely you would have any at all. While you might try to launch an argument vis-a-vis the actual wording of the policy, one company puts it succinctly: "Your participation in a motorized race or motorized speed contest, including training or practice for the same, is not covered."
You might want to shape a different argument, but I'm betting you'd lose.
Likewise will individuals who think rock- or mountain-climbing is a fun and interesting challenge.
If you're participating in a professional sport, you'd better be sure your sports body has sufficient coverage because your travel-insurance policy likely excludes such activities as well.
A point I found most noteworthy relates to the insurance companies' recommendation that you be transported home for medical attention.
If something happens to you on your trip which you at first find serious, but think you'll complete the vacation in spite of the insurance company's request for you to return home at their expense, you are strictly on your own. Should your condition worsen, you can't go back to them and try to reinstate the coverage. Once you refuse to be returned, it's gone.
While I have isolated a few areas where travellers would not be covered, for the nth time I repeat: To leave home without travel insurance is sheer folly. There are many stories I could relate where the decision to decline resulted in several thousand dollars of out-of-pocket expenditures.
QUESTION: I want to rent a car in Europe for two weeks in September. When I checked with a number of sources, including CAA, my travel agent, and my credit card's help centre, about third-party coverage for damage done to another person's car or liability for injuring a third party, I struck out.
They all have varying degrees of coverage available for damage to my rental, but not necessarily third party liability.
What is your understanding about this issue?
ANSWER: This too is a very complicated issue. I talked with John McClellan, owner of Discount Car and Truck Rental on Gertrude. Most car-rental companies, in your initial contract, supply only the very basic coverage on their cars, often as low as required by the state or country involved. Also, third-party liability in many out-of-province jurisdictions is not included if the company can get away with not providing it.
If you are renting your vehicle in other parts of Canada or the United States, he recommends travellers purchase coverage from our own MPI, which launched a program a few years ago which does, in fact, provide fairly substantial third-party liability coverage.
We often count on our credit-card coverage to protect us, but most often third-party liability is also limited or not covered. Damages to your car rental will be taken care of, but not necessarily damage to the other car involved in the accident. You need to examine all the details in your credit-card agreement.
The concept of 'no fault' does not exist in other destinations, as we are seeing with Canadians caught in the crossfire of Cuban policy and legislation around vehicle accidents.
There, you have to prove your innocence, not an easy thing to do with language and cultural barriers in your way.
No one likes to pay the extra costs related to automobile rentals when we travel, but the minimal coverage provided by your car-rental company will not likely go far in the event of an accident. Car-rental companies make a good part of their revenues on the supplemental coverage offered.
We may not be happy paying but, in the end, the investment is small compared to the risk of not having that protection if we get into an accident.
McClellan also added some additional good advice when renting overseas. You should not likely rent from local brands with limited storefront locations, but rather from recognized, worldwide names that have universal criteria for insurance coverage at their franchises.
QUESTION: I understand that insurance companies were not providing coverage against trip disruption relating to volcanic ash if going to Europe. Is that correct?
ANSWER: That is correct. They were not. Three months after the volcano erupted in Iceland, you still could not get full insurance coverage against a repeat occurrence. For that period of time, most insurance companies refused coverage in the same way they looked upon pre-existing conditions.
But two days from today, on August 16, at least one of the insurers will be reinstating that coverage. In a memo sent out just a couple of weeks ago, RBC said clients who purchase travel-insurance coverage with trip cancellation/interruption benefits and have a departure/return date on or after August 16 will be considered for coverage under their policy, provided no further volcanic eruptions occur before August 16 and all other policy terms and conditions are met.
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