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What Happens If Your Travel Insurance Company Goes Bankrupt?

It’s not something that you want to think about while you’re on vacation.

But what happens if your travel insurance policy underwriter goes bankrupt?

If the insurance company that underwrites your travel insurance company becomes insolvent, a Canadian not for profit company called Assuris protects Canadian policy holders.

Tip for Visitors to Canada InsuranceNote: This article only covers what happens if your travel insurance company fails. If your travel agent or tour company goes bankrupt, you’ll need to contact the consumer protection branch in your individual province. We have a post in the works that outlines the steps you’ll need to take if your travel agent is insolvent. Sign up for our email notifications so you don’t miss it.


In the case of bankruptcy, Assuris makes sure that your travel insurance policy is transferred to a solvent company. Assuris ensures that you will retain up to $60,000 or 85% of the promised benefits, whichever is higher.

While a quick read of this suggests that you’re only covered for $60,000, this isn’t the case. You’re actually covered for 85% of your original policy maximum, and expenses under $60,000 are covered at 100%.

This means that you’re covered for 85% of your original policy maximum benefit. If, for example, you have a claim on your travel insurance of $125,000, and a maximum benefit of $150,000 on your policy when the travel insurance company goes bankrupt. You will be covered for 85% of the $150,000 policy maximum, or $127,000 maximum. In this case, your entire claim ($150,000) is covered by Assuris protection when the company fails.

However, if your expenses are below $60,000, they will be fully insured, as long as your original policy maximum benefits would cover the expense.

All insurance companies authorized to sell insurance policies in Canada are required, by federal, provincial and territorial regulators, to become a member of Assuris.

But not to worry. In Canada, only four life insurance companies have ever gone bankrupt (Les Coopérants on Jan 3rd 1992, Sovereign Life on January 18th 1993, Confederation Life on August 11th 1994 and Union of Canada Life in 2012).

It’s also possible that the liquidator that is appointed to manage the company failure has a greater return on the policy than the Assuris protection, which is $60,000 or 85% of the promised benefits. If this is the case, your benefits will be adjusted to the greater of either the Assuris protection or the amount recovered by the liquidator.

If you have more than one travel insurance policy, Assuris provides separate protection for each policy.

Does Assuris have enough money to pay out if there’s a massive bankruptcy?

Assuris’ website says that the company has a current Liquidity Fund of at least $100 million that’s designed to meet Assuris’ obligations in any insolvency. In the event of an insolvency, Assuris can then assess its member insurance companies for the necessary funds to cover the cost of providing Assuris protection to policyholders.

Assuris, formerly known as CompCorp, changed its name to Assuris on December 1, 2005.

Has your travel insurance company ever gone bankrupt? Contact us – we’d love to hear your story.

*As always, the information on this page is from one Canadian traveller to another. We have spent years abroad and have gotten to know the ins and outs of the industry however we are not travel insurance agents. If you have any travel insurance questions, please talk to a qualified travel insurance agent or broker. Finally, policies and plans can and do change all the time, without warning, so always consult your insurance policy since that is the legal document to which you are agreeing to.
*This article is only intended as general advice. Please check your own policy carefully.

A true world traveller, Lanie Kay has been to over 30 countries in the past decade and loves nothing more than waking up in a foreign country. Born and raised in western Canada, she knows the value of a dollar and, just like everyone, wishes there was more transparency when dealing with large companies.

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