What Mexico’s cartel violence means for travel insurance

More than 61,000 Canadians were advised to shelter in place Feb. 22 when cartel violence escalated in parts of Mexico, including popular tourist destination Puerto Vallarta. 

The situation has since settled, but thousands of tourists are still waiting to come home. 

“That number is likely higher,” says Will McAleer, executive director of the Travel Health Insurance Association of Canada (THIA). “We’re seeing reports of the Government of Canada site crashing with the number of people trying to access it.”  

Fuelled by the killing of Mexican cartel leader “El Mencho,” the chaos caused Canadian airlines to suspend flights. Travelers had to stay put and follow instructions from local authorities.  

“The circumstances in Mexico are unique in how quickly the situation escalated and how quickly airlines responded in ceasing inbound and outbound flights,” says Kyle Sparkman, managing director and head of Allianz Global Assist Canada, the country’s largest travel insurer. 

Policy specifics

Also unique, adds McAleer, is that the Government of Canada did not change the threat level for the area amid cartel violence. Depending on the policy wording, the threat level can trigger coverage for travel cancellation, interruption, or flight delays.  

“During COVID, when the Government said avoid all travel, all policies went into effect,” McAleer says. “When we had travel disruption in Cuba [earlier in February amid fuel shortages on the island], it issued an updated advisory to avoid all non-essential travel, the covered risk that triggers a trip cancellation and interruption policy. 

“For Puerto Vallarta, the threat level stayed at Level 2, which is exercise a high degree of caution, and it has been Level 2 in just about every tourist area in Mexico for a very long time. That level does not trigger a policy.”  

This stresses the need for travelers to have the right coverage. The Mexico event is a good reminder that unexpected incidents can happen anytime, anywhere. For those without travel insurance, or the right type, they also had to worry about how to pay for unanticipated expenses.  

“Insurance coverage typically varies by supplier and product,” says Sparkman.  

Depending on the plan, impacted travelers may have benefits if a pending trip was cancelled prior to departure or if while in Mexico due to trip interruption or delay. 

Key coverages

Interruption coverage is listed separately within cancellation policies, if included, and typically requires a trip to be interrupted or delayed for a covered reason and after a minimum period of delay. Benefits cover additional meals and accommodation, with a per-day and overall maximum limit. Some policies may also include communication costs and added travel expenses to rejoin a continuing trip or return home. 

“Securing insurance that provides protection not only for medical emergencies, but trip cancellation, interruptions and delays, is a must for all Canadians travelling abroad,” Sparkman insists.  

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Critically, brokers must make sure upcoming travel plans and insurance needs are part of every conversation. They must review coverage details with customers and encourage them to read their travel insurance policies to understand what is and is not covered. Customers should be reminded to keep an eye on government advisories and travel safety recommendations. 

Customers should also be advised to look at limitations in embedded policies they may already have, adds McAleer, in case those plans do not meet all needs for a particular type of trip and extra coverage is required.  

“The right time to be looking at policies isn’t when emergency strikes,” says McAleer. And while many brokers already do so, he says more also need to share the value of support and services travelers get beyond a payout should plans go awry.  

“Everyone wants a carefree vacation,” he says. “But if things change, if things are disrupted, if you are in an accident, who’s going to help you navigate your way through the emergency and help get you back home?”