Travel insurance now more important than ever

Travel insurance now more important than ever

By Bob Boughner,  Postmedia News

Travel insurance coverage is about to become more important than ever before.

The Ontario government plans to eliminate OHIP’s out-of-country travel insurance coverage by Oct. 1 as part of its larger initiative to reduce the provincial deficit. The province has been spending $2.8 million to administer approximately $9 million in claim payments through the program annually.

OHIP currently covers up to $400 per day for emergency in-patient services such as intensive care and up to $50 per day for emergency outpatient services and other doctor services.

Jill Wykes of Snowbirdadvisor.ca tells me that while these amounts may seem significant, they are actually quite minimal when you consider the cost of medical treatment for Canadians travelling abroad. For example, the typical cost for an inpatient stay in a U.S. hospital can be $10,000 per night and, in most cases, an individual without supplemental travel medical insurance would only be able to recover about three to five per cent from OHIP for the cost of emergency medical treatment received outside Canada.

Wykes tells me that, unfortunately, many travellers are currently under the false impression that their provincial health plan will cover most or all of their out-of-country medical expenses.

She says this false sense of security can lead these individuals to not purchase supplemental travel medical insurance, which can result in serious financial hardship if they require emergency medical treatment outside Canada.

Wykes tells me that insurance companies are still digesting the recent change to OHIP coverage but it’s likely that the cost of travel insurance will increase to cover the amount that no longer will be covered by OHIP.

Wykes says that because the amount currently covered by OHIP is quite small, it’s likely that any premium increases will be relatively small as well.

It’s also interesting to note that Canada plans to begin tracking snowbird exits and entries.

Snowbirds who spend long periods of time in the U.S. can face a variety of negative consequences if they violate certain residency rules in Canada or the U.S. Canadian snowbirds need to be very clear about the rules that affect their various benefits at home as well as how long they can stay in the U.S.

Complying with U.S. residency rules is a must for Canadian snowbirds from both a tax and immigration standpoint. While most snowbirds are aware they can face negative consequences in the U.S. if they spend too much time south of the border, fewer snowbirds are aware they can also face negative consequences back in Canada if they spend too much time outside the country. There is a possible risk snowbirds could lose federal benefits such as the OAS and guaranteed income supplements.

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