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Canadian regulators discover improper travel insurance practices

As a travel manager, it is important to make an informed travel insurance choice. With a good insurance, it is easier and safer to send travelers to vulnerable places without having to worry. However, Canadian regulators have now found that insurance companies leave customers confused about their policies.

Complicated travel insurance policies

Some Canadian travel insurance companies have figured out a way of confusing their clients such that they fail to make a right decision about their insurance policies. This has been determined by a report produced by regulators investigating the insurance system. The documents are often too complicated for the average consumer to read and understand.

The Canadian Council of Insurance Regulators report, obtained and disclosed by Postmedia News, stated that many travel insurance policies are sold without proper medical questionnaires beforehand. Other policies have terms with complicated jargon that potentially leave policyholders with no insurance coverage.

According to the report, insurance companies do not provide enough information for consumers to make an informed choice about the policies they want. “Current practices do not appear to meet this objective, and they do not treat customers fairly,” says the insurance regulators.

Based on their findings, the regulators are now preparing recommendations for travel insurance providers. “Our working group is actively working with other regulators in Canada to address consumer concerns about travel insurance products sold both locally and nationally,” said Chris Carter, deputy superintendent at British Columbia’s Financial Institutions Commission (FICOM), which is a member of the Canadian Council of Insurance Regulators.

If this is approved, it will affect travel insurance already sold to people going out of the country across Canada.

The regulators listed an array of problems with travel insurance. For example, they found that 95 percent of applicants were automatically being approved for policies without the insurer determining whether a traveler's medical condition could exclude any claim.

"The working group considers this to be an exceedingly high automatic acceptance rate and is surprised that very few applicants have to undergo medical examinations during the underwriting process." This is in huge contrast with applications for health and life insurance, where there are properly examined. The regulators believe travelers are given "a false sense of security," because of the quick acceptance.

Travelers are usually in a rush to get an insurance cover before going abroad; this would leave them no choice but to choose the coverage regardless of whether they have any pre-existing medical conditions. They would have to read long and complex policies, including "medical questions that are too complicated for even medical experts to understand," as the report said.

Another thing which the regulation council noted is that the premiums are based on the value of the trip, duration of the trip and the age of the traveler.

If any travelers have any complaints about the travel insurance, they can contact FICOM, before the recommendations, which are expected later this year, are drafted.

We know what you consider important to you and we can ensure that your humanitarian rights are intact while helping those in need. That is why, if you have any questions regarding travel insurance or additional travel services, never hesitate to contact the nearest Raptim office!