Snowbirds need to read fine print on travel insurance insurance, fine, print, need, Snowbirds

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Snowbirds need to read fine print on travel insurance
Are you among the 1.5 million Canadians who go south for the winter?

You can have a more enjoyable southern vacation when you are prepared for the downside risks. What if you have an accident or illness in the U.S.? Will you have to file U.S. income tax returns?

Buy travel insurance

If you become seriously ill while you are in the United States, your provincial health insurance plan usually covers only a small fraction of out-of-country emergency health-care costs.

The average cost of a medical emergency outside of Canada is $26,000 US. Without insurance, this unexpected expense could jeopardize your financial wellbeing.

A six-month travel insurance policy can cost you less than $1,000. Compare that insurance premium cost to the $39,400 cost of a four-day stay in a U.S. hospital for an appendectomy, for example; or, a one-day stay in a U.S. hospital for a broken arm and wrist, which could cost you $32,600. A lengthy recovery in hospital from a car accident could cost you (gulp!) from $300,000 to $400,000.

About 43 per cent of travellers do not buy supplementary travel insurance because they feel they have enough out-of-country coverage through a credit card or a retired employee benefit package.

Read the fine print to learn about limitations. Check the number of days per year that you are covered for out-of-Canada travel.

Check for deductibles that have to be paid up front. Find out if your insurance company will pay the physician or hospital directly when you make a claim.

Or do you have to pay the full amount yourself first and apply for reimbursement from the insurance company?

Better yet, find an insurance broker who understands the terminology of travel insurance contracts since definitions change from year to year.

When you apply for travel insurance, disclose your medical history accurately. Make sure the insurance company has no excuse to deny coverage.

You can claim your health insurance premium as a medical expense on your Canadian income tax return.

Income tax returns

If you spend a lot of time in the United States each year -- that is, more than 122 days, or four months, on average -- the Internal Revenue Service (IRS) may consider you to be a U.S. resident. To avoid the need to file a U.S. tax return, you should submit IRS Form 8840, a closer connection exemption statement that says you are considered to be a resident of Canada.

Finding out more

For more information on cross-border issues there is a book by Terry Ritchie called The Canadian Snowbird in America.

Ritchie explains how U.S. immigration rules automatically place snowbirds in a B-2 visa category that allows you to visit for a maximum of six months.

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Travelling to the U.S. in winter is great fun, but if you have a sudden medical emergency and no health coverage, you could be in big trouble.