This article has been updated from a previous version.
Planning a getaway? One thing you’ll want to add to your pre-trip To Do list is purchasing travel insurance.
But depending on what you’ll be doing during your vacation, you might have questions regarding what your travel insurance policy covers when it comes to accommodations and excursions.
Where do insurance providers draw the line in terms of coverage?
When it comes to travel insurance, there are two distinct types: Travel medical, and trip cancellation/interruption.
Travel medical insurance generally covers emergency medical expenses incurred while you’re on vacation.
Trip cancellation/interruption covers any damages or expenses incurred in the event your trip is cancelled or interrupted. This includes things like accommodations and excursions.
“Cancellation/interruption is certainly something that a lot of people are thinking about right now as we look at our record-holding as the number one airport in the world for delays and lost baggage,” says Will McAleer, executive director of the Travel Health Insurance Association of Canada (THIA), referring to Toronto Pearson airport being ranked the worst in the world last July by flight tracking site FlightAware.
In fact, McAleer says those in the industry are starting to see some individual insurance providers now consider major airport delays and lost luggage to be “known risks,” so travellers are advised to ask whether their policies will cover certain losses such as a missed connecting flight in the case of delayed baggage.
Read more: 6 common reasons travel insurance claims are denied
According to McAleer, even the most adventurous activities can be covered under travel insurance policies, including scuba diving, rock climbing, zip lining, and hiking. But coverage requirements will vary among providers, so always ask, and never assume. If you’re considering an extreme activity, like skydiving or rappelling down the mouth of a volcano, you should notify your insurance provider ahead of your trip. Not every policy covers these kinds of high-risk sports.
Instead, McAleer says most trip cancellation/interruption insurance will cover things such as non-refundable event tickets (think concerts or theme parks) as well as accommodations. “As long as the reason you can't go is tied to one of the covered risks in the policy, then [the insurer] will be in a position to compensate for that.”
However, insurance will cover only your non-refundable expenses up to the sum insured under your policy. That includes flights, accommodations, and excursions. So, if your maximum coverage is $10,000, you’d be out of pocket for anything beyond that amount. Travellers must work directly with the provider of the service they’re making a claim for before insurance kicks in, too. As an example, if your Airbnb provides a 50% refund for cancellations with less than 24 hours’ notice, you could claim only 50% of the fee through insurance.
McAleer says the golden rule when it comes to choosing travel insurance is to know your policy.
“Make sure that they're covering you for what you expect to be covered,” he says. “If you've got any questions about it, there are toll free numbers set up to help you make sure you understand the coverage so there aren’t any surprises.”
He adds that travel insurance providers are becoming increasingly clear in their policy language so that there isn't as much of a need to look at the fine print when you're having to make a claim.
Having the right travel insurance boils down to three things, McAleer says:
“We've seen a larger uptake in insurance purchasing for the individuals who are travelling,” says McAleer. As pent-up demand persists, travel costs are rising, and people are spending more money on trips than they may have previously.
“If you're not covered, that is a huge risk. Having that layer of protection is really important."
Read next: COVID-19 travel insurance coverage: what’s changed in the last two years?