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Travel experts warn out-of-country medical insurance may be insufficient for COVID-related illnesses

Travel experts are warning Canadians that out-of-country emergency medical insurance may not be adequate for COVID-related illnesses, leaving them at risk of potentially having to pay out hundreds of thousands in medical bills.

Vancouver-based Goose Insurance Services Inc. is the latest insurance broker to offer emergency medical coverage – in partnership with insurer Lloyd's of London and MSH International (Canada) Ltd. – for COVID-19. For $99 a year, clients can get up to $500,000 of pandemic coverage when travelling 200 kilometres or more away from their principal residence. Those over the age of 60 must qualify through a medical questionnaire.

Last month, major airlines in Canada – including Air Canada, WestJet and Air Transat – began to offer free COVID-19 medical coverage for claims up to $200,000 for passengers who book some overseas flights and trips to Mexico and the Caribbean. WestJet later added all U.S. destinations to flights booked on or after Sept 18.

Vacation package operators Sunwing, Air Canada Vacations, Flight Centre and WestJet Vacations also introduced free COVID coverage in early September with limits ranging between $100,000 to $200,000.

The automatic coverage for travellers includes all medical expenses related to COVID-19, such as medical consultations, specialty care, hospital admittance, surgery, air ambulance (which in some cases is capped at $100,000) and, if medically necessary, intensive care treatment.

This month, Manulife Financial Corp., Canada's largest insurer, is launching its own pandemic travel plan to individuals travelling within Canada, the United States and overseas – including countries with a Level 3 travel advisory (which is to avoid all non-essential travel). The policy provides up to $5-million in emergency medical coverage, but caps any COVID-19 related expenses at $200,000.

Manulife said in a news release last month that the product was developed as it "understands that some Canadians have family, business and other important reasons for travelling in-country and to global destinations," however the insurer "strongly encourages travellers to adhere to the recommendations of the Government of Canada and medical professionals."

Travel insurance brokers say that while the introduction of specific coverage for COVID-19 – which many travel policies omitted last March – is a step in the right direction, they are advising clients to be wary of policies that can leave you stranded without sufficient medical coverage. Many travel experts recommend travelling with policies that include at least $2-million of out-of-country medical emergency coverage.

"The fact that these airlines are limiting the amount of COVID-related medical coverage at much lower amounts than typical emergency medical policies tells you that they want to limit the risk of potentially receiving a massive claim," said Martin Firestone, president of Travel Secure Inc., and an insurance broker in travel medical coverage. "Well, who do you think will get stuck with the massive claim over and above the $200,000? It's going to be the traveller."

Mr. Firestone warns clients that while a $200,000 policy may seem to be sufficient when travelling for a one-week vacation to the Caribbean, they could end up having to be airlifted to the nearest ventilator in the United States – resulting in medical bills that total hundreds of thousands of dollars.

"These policies are providing a false sense of security and incentivizing people to take vacations while the Canadian government has advised you not to travel," he adds. "If we continue to have these advisories in place, the government needs to step in and prevent anyone from inducing people to travel abroad."

In addition to the coverage limit being set too low, travel insurance specialist Isabelle Beaudoin says she is concerned about the airlines' coverage duration, which for most is set at 21 days. That mean for those individual travelling beyond 21 days will not have coverage.

Also, she says, it is important to read the policy's fine print. For example, travellers cannot top up the free 21-day airline coverage with another policy to extend their stay or the airline coverage will be null and void.

"This will increase the risk of exposure to COVID if people – such as snowbirds – have to travel back and forth to gain additional coverage," Ms. Beaudoin says. "Most of my clients are snowbirds looking to reach their vacation rentals or properties in the [United States] for three to six months and stay put."

Ray Battiston, an independent broker with 40 years' experience selling travel insurance, suggests travellers – especially snowbirds – apply for medical insurance that includes COVID-19 as part of a much larger basic policy.

"I would certainly not feel comfortable – or advise any of my clients – to leave the country with just $200,000 of coverage," Mr. Battiston said.

Medipac Travel Insurance, Ontario Blue Cross, Québec Blue Cross and Tour+Med travel insurance all reinstated medical emergency coverage for COVID-19 in their travel insurance policies in July – which in some cases provides coverage up to $5-million.