Millennials who travel without insurance are playing a risky game

(Flickr/TijsB)

A new survey reveals that young people do not buy travel insurance, despite being at the highest risk for injury of any group of travellers this summer.

The survey commissioned by Allianz Global Assistance as part of a larger study to help determine the Canadian public’s current travel insurance buying habits revealed that over 43 per cent of travellers who don’t buy travel insurance when they travel are aged 18 to 34. However, according to Allianz’s own claims data between 2014 and 2016, travellers under 30 make up 32 per cent of all claims – the highest of any age bracket.

“It’s not uncommon for younger travellers to not understand the risk of having a medical emergency when they travel,” says Dan Keon, Senior Director, Market Management at Allianz Global Assistance. “They are likely in good health and assume that if they don’t have anything happen to them when they’re at home, chances are nothing will happen to them when they travel. What is surprising is just the sheer number of young people who don’t buy travel insurance.”

According to the survey, 15.8 per cent of uninsured millennials felt travel insurance was unnecessary, 15.3 per cent thought it was too expensive and 14.9 per cent felt their trip was too short to warrant getting insurance. But ask those in the industry and they’ll tell you that many of these reasons are just dangerous assumptions.

The cost of insurance vs. the cost of injury

“Most young people say, ‘I’ll be okay, nothing will happen,’ so they don’t buy insurance,” says William Shung, a senior insurance broker with LSM Insurance based in Markham, Ont. “It’s very similar to buying car insurance. You don’t get in a car accident everyday, but when you do, it can cost a lot of money,”

In the U.S., a visit to the emergency room can cost around $4,000. If you need any testing or x-rays, the cost balloons from there. For something more serious, such as being admitted to hospital for a couple of days, the cost can be up to $7,500. The average three-day hospital stay in the U.S. is $30,000.

Keon says that if you break your leg — e.g. if you fall and break your femur — surgery and admission to hospital can cost a minimum of $100,000 if you’re in a foreign country that is not equipped to handle your injury. You may need to be flown back to Canada by air ambulance and he estimates that just the flight can cost $50,000. Meanwhile, a basic travel insurance plan for a young person going on a week’s vacation is a pittance in comparison.

“The cost of travel insurance will change depending on your age and how long you’re travelling for, but if you’re in the younger demographic and you’re travelling for a week, you should be able able to find travel insurance for $25 to $30,” says Keon. “Travel insurance can be a pretty reasonable investment when you consider some of the risks and situations it covers.”

 The amount of coverage you can get varies according to your insurance provider and the type of injury you sustain, but Keon says he has seen $1 million, $5 million and $10 million polices that can be had for the cost of a restaurant entree.

“If you stay longer in a given location, your risk of injury goes up and so does the cost,”says Shung. “The shorter your stay, the lower your risk, so the cost is much cheaper.”

Even though millions of dollars worth of coverage can be had relatively inexpensively when you’re young, that doesn’t mean you’re entitled to that coverage under every circumstance, some exclusions can apply, so it’s important to find a plan that’s right for the circumstances of your trip.

When can coverage be denied?

The idea behind most travel insurance policies is to cover you for a medical emergency that happens to you while you are on your trip, it will not not cover you for something that happens to you as a result of you being already sick and/or disabled before your trip. You will also be denied coverage if your injury is self-inflicted.

“If you leave on your trip knowing that you may need to seek treatment, you’re not going to be covered for that. Certain activities may also be excluded from your policy, as well as certain destinations, so it’s important to review your coverage, regardless of your age, and understand what you’re covered for, so if you do need to file a claim, there are no surprises,” says Keon.

Most policies have a five to ten day review period where if you review the policy and you have any concerns or you don’t think it’s a good fit, you can call and cancel the policy within that period for a full refund.

“People should take full advantage of that and call their travel insurance. company just to make sure that where they’re going and what they will be doing will be covered,” says Keon.

A high-risk destination or activity in your itinerary doesn’t immediately disqualify you from receiving coverage (it depends on the provider) but if you travel to a war zone for example and your injury is a direct result of that war, you will almost certainly not qualify for coverage.

“If people go hang-gliding or partake in a dangerous sport, you may not be immediately disqualified for coverage, but the cost of insurance will definitely go up and it depends on the provider as to how much,” says Shung.

Not only should you review your policy for any relevant exclusions, but it’s important to shop around and find a policy that fits the circumstances of your trip and will cover you for all activities you may engage in.

Picking your provider

For the average person, whether your travel insurance coverage comes from a private insurance broker like LSM Insurance or a huge corporation like Allianz Global Assistance doesn’t really matter, as long as the coverage fits your needs and your price range. There are pluses and minuses to both options.

“Going with a bigger insurance company can be better because it can be easier to make a claim from wherever you are,” Shung says. “When you’re injured or sick in a foreign country, you don’t want to wait — you want your claim filled right away.”

Dan Keon also points out that when you’re injured in a foreign country most people underestimate the difficulty of coordinating your health needs when language and cultural barriers exist. A larger corporation is more likely to have the resources to make any necessary arrangements for you and make sure all arrangements go smoothly while you focus on recovery.

“In any distribution channel, whether online, travel agent, broker or bank, if you’re buying directly from a travel insurance provider, those plans are generally provided by an actual travel insurance company,” Keon says. “Do the research to make sure the company is reputable.”

If you feel you are a more high-risk traveler who is traveling to a potentially dangerous location or if you are traveling to partake in a risky activity, you may want to enlist the help of a broker to steer you away from a standard policy to a more specialized plan.

“If a convenient purchase process is the difference between getting insurance and not getting insurance, it’s better to have it than nothing at all,” Keon says. “Medical emergencies can happen to anyone, anywhere, regardless of age or how long you’re traveling for, so it’s important that people get travel insurance before they go and take the time to understand their policy.”