You buy travel insurance to ensure a health mishap outside Canada doesn't turn into a massive financial burden.
But it appears you need a lawyer beside you when you fill out the insurance application, judging by some cautionary tales reported by CBC News's Go Public reporter Kathy Tomlinson.
Two Canadian seniors have been saddled with U.S. medical bills of more than $100,000 after their insurers used apparently minor, innocent mistakes in their completed forms to void their policies.
“I would have sworn on my life that I filled everything out correctly," said 67-year-old Joanne Parr of North Bay, Ont., who now owes about $128,000 after suffering kidney failure in Florida in 2011.
"With my sight (legally-blind Parr used a magnifying glass to fill out her form), I check everything I do three or four times. It makes no sense to answer something incorrectly. Why even pay the premium? You are just throwing money out the window."
Parr's apparent mistake was in the way she answered a question on whether she'd been treated for heart problems in the previous 12 months when she applied online for her policy in August of 2011. She answered no despite having gone to hospital with chest pains the previous October.
Parr said she assumed the question applied to the 12 months prior to her travel date, which wasn't until December, similar to time periods on other policies.
“My mind was thinking departure date, because that is when I was paying my premium from,” Parr told CBC News.
“There’s one question right after the one they got me on — another question about your heart — and I answered yes to it. So, it just kind of proves that I didn’t try to get away with anything.”
John Toljanich, 74, of North Vancouver, B.C., saw his travel policy voided after he suffered an unprecedented bout of pneumonia while in California that cost $112,000.
The cancellation of the Manulife policy was triggered by his negative answer to a question about whether he'd ever been treated for bowel disease, part of a long list of conditions the policy asked about.
In fact, Toljanich has ulcerative colitis but has not had a flareup since 1965, so he didn't think it was relevant, CBC News said.
However, Manulife said because he takes a drug to prevent recurrences, that constitutes treatment and justifies cancelling his policy.
“They call it fraud on my part – or misrepresentation. It said that right in the letter,” Toljanich told CBC News.
Both Parr and Toljanich have appealed their claims.
Royal and SunAlliance would not comment on Parr's case, citing privacy rules even though she was prepared to allow them to speak. Manulife confirmed only that Toljanich's appeal is being considered.
It's the second such case Tomlinson has turned up in the last year or so. In November 2011, she reported the case of B.C. pensioners Artur and Anna Friesen, who bought insurance from Prime Link, underwritten by Manulife, for their annual motorhome trip to California.
Anna Friesen was hospitalized with a blood clot in her leg, with five days of treatment generating a $50,000 bill. But the insurer refused to pay, citing a misstatement on her application concerning treatment for kidney disorders in the previous three years.
The Friesens, who struggle with English, had help from insurance broker Barrie Cartmell in filling out the form.
"I had no treatment and I just had weak kidneys, and that is what we talked about [with the broker]," Anna told CBC News, while her husband added the broker seemed satisfied with her answer.
Despite letters from doctors stating she had not received any treatment for her kidney condition, Prime Link denied the claim, determining she had chronic kidney disease "for which you have undergone investigations, which is considered treatment."
The Friesens began getting calls from collection agencies and were afraid to cross the border.
John Toljanich said the stress of his debt has forced him to take anti-depressants, while both he and Parr may have to remortgage their home to pay their medical debts.
Independent insurance broker Bruce Cappon of Ottawa told CBC News he's seen several claims by seniors denied because of what he calls the "one strike, you are out" clause in applications.
"The deck is stacked in the insurance company's favour," he said.
Cappon also warned against the "open barn door" clause, where unreported changes in health status between the application and the trip can allow the insurer to cancel a policy.
If they're ensnared, Cappon urges seniors to fight back by appealing the decision and then going to the company's ombudsperson. It might also be possible to negotiate a reduction in the bill.
"U.S. hospitals will almost always discount bills by at least 30 to 50 per cent," he said.
That's what the Friesens did. She appealed to the hospital's financial-assistance program and her entire bill was forgiven.
Travel-insurance experts offered Go Public these five tips to help avoid potential problems.