Backpacker Insurance
Travel Insurance for Canadian Backpackers
Why backpacker insurance? You have finally graduated from university or you have decided that it is time to leave your current job, but you are not quite ready to settle down. If you are like many young people, you have thought about taking a year (or two) off to travel. It is of course a lot easier to travel when you are still young and/or free of obligations. But don't shrug your financial responsibilities onto other family members. If something happens when you're off traveling, make sure to have insurance in place so someone else doesn't have to pay for your misfortune. If you have planned ahead, you may have been able to squirrel away a few thousand dollars to pay for your trip. If not, there are of course many ways to take a ‘working holiday’. Examples include applying for an ‘International Experience Visa’ to one of many countries such as France and Australia, teaching English in Japan or China or volunteering to work for an NGO in South America or Africa. While most backpackers take the time to obtain necessary documents including visas, international student identity cards and international driving permits, many young travelers neglect to adequately research one of the most important parts of overseas travel – medical insurance. As a Canadian resident, you should know the rules. Provincial medical care only covers Canadians during ‘temporary absences’ from Canada. Practically speaking, this normally means up to 183 days, though some provinces such as Ontario will cover you for up to 212 days. It is also sometimes possible to obtain a ‘one-time waiver’ whereby you will be permitted to remain on provincial medical for an absence of up to one year. However, be sure to apply for this waiver well before your trip begins. If you are still covered by one of the provincial plans such as OHIP, it is fairly inexpensive to purchase a standard emergency medical travel policy. These policies always require that you continue to be a member of a provincial medical plan. For example, a quote on a comparative insurance quote engine such as bestquotetravelinsurance.ca shows that a one-year Canadian policy for a 25-year old is available for as little as $470. Add to that an average annual OHIP premium of $360, and the total bill comes to $830. By comparison, a basic global expat policy for Canadian travelers without provincial health care can be had for as little as $732. Yes, the coverage offered by expat plans such as the TIC Global Expatriate Plan is more limited than what is offered by a standard Canadian policy. However, unlike seniors spending the winter in Florida, young backpackers are usually not concerned about coverage for pre-existing medical conditions. Residents of BC, where standard annual MSP premiums are now $798, will normally find it cheaper to leave MSP and purchase an expat policy. Likewise, if you are leaving for more than one year, your only choice is an expat policy. Another consideration is the wait time to rejoin a provincial medical plan when you return to Canada. Many provincial plans including OHIP and MSP will not cover returning Canadians until they have been residents for three months. Therefore, if you are purchasing expat insurance, you may need to add an extra three months to your policy. A final option offered by most policies is a deductible. Like auto insurance, a deductible means that in the event of an injury, you would pay the first $100, $500 or $1,000. This is one way to reduce the cost of insurance. You may also find that for small medical bills, it is easier to just pay them yourself. After all, it is often not worth the time and effort to put your trip on hold while you complete and mail back a claim form and receipts to a Canadian insurance company. Many young adventurers on a budget opt not to purchase any medical insurance. This is, of course, a risky proposition. Medical costs have been increasing worldwide over the past few decades, and it is now not uncommon to see US-style hospital bills in other countries. Some countries, such as the UAE, will even block the departure of foreign nationals who attempt to leave the country with outstanding medical bills. If you do not have the money, they may look to family members back home to cover your bills. So enjoy your trip, stay safe, and make sure you are covered for unexpected accidents or illnesses before you leave. About the author Vance Derban is a licensed insurance broker at BestQuote Travel Insurance Agency. He can be reached at [email protected].