Travel, But Not Without Insurance!

Understanding Travel Insurance

Whether it is a domestic or an international flight that you have booked, the probability of something going wrong either with the flight or at the place you visit is quite high. Flight cancellations, loss of baggage, hospitalisation in a foreign country or theft of passport are just some of the common problems. It is here that travel insurance comes to your aid. The article explains how

Now that the fear of the pandemic is subsiding, it is quite likely that international travel will return to the pre-pandemic levels. Scheduled international flights were suspended on March 23, 2020 to contain the rising corona virus cases. They were supposed to see a gradual resumption from December 15, 2021 but then the following variants of the virus did not allow the same to happen. So, it’s almost after two years that we may see the resumption of normal international flights. Even the operation of domestic flights was curtailed due to the increasing number of cases across all the states of India.

Given that, we are still not out of the woods in terms of the pandemic since a new variant may emerge from any part of the globe anytime, thereby once again impacting the travel sector. Also, new rules and requirements have cropped up in the wake of the pandemic – the vaccination certificate, for example. Meanwhile, travel insurance, which was mandatory while visiting some of the countries, now has additional caveats to cover medical emergencies in case the traveller contracts the virus or accommodation expenses in case of quarantine. In the normal course, travel insurance also covers other financial liabilities arising out of a wide range of difficulties.

These include flight cancellations, flight delays, baggage loss and loss of passport during the trip, etc. All of these eventualities come with a cost that might adversely impact your finances or the travel budget. It may not be possible to avoid such unpredictable events but we can protect ourselves from such situations occurring during a journey and get compensated for the same by buying appropriate travel insurance. In fact, this should be your mainstay while you are planning to travel. It is quite common enough to see travellers avoiding travel insurance where it is not compulsory since there is a general feeling that any such compensation is difficult to obtain.

The graph above clearly shows there was a continual increase in tourism domestically as well as overseas till FY20. After that it was hit by the pandemic and therefore slowed down considerably. However, going ahead as the situation normalises, we may see both domestic and overseas travel riding ahead on the wave of a new momentum. As per a report published in December 2021, international travel jumped up nearly two times while advance bookings for the Christmas week witnessed a 400 per cent jump as compared to last year. Travel agents also witnessed a significant surge in both international and domestic bookings for popular leisure destinations like Goa, Chandigarh and Jaipur for the end of the current year.

Worthiness of Travel Insurance

Most travellers, as mentioned before, are of the opinion that the premium paid towards travel insurance is worthless as the kind of incidents covered by it may not happen during their trip. Here, you have to always keep in mind that though the probability of any such event taking place may be quite less, the financial burden imposed in the case of any such occurrence can be quite heavy. As is known, medical or healthcare cost in countries like the US or the UK are much higher than in India. Also, it is quite common to find that airlines misplace luggage. There are also incidents of missing the flight or getting physically injured during an incident of a plane hijacking, etc. All this can cause both mental and financial stress. Therefore, in order to have a hassle-free trip you should invest in travel insurance before you leave.

Understanding Travel Insurance

Travel insurance is offered by general insurance companies covering you against any unforeseen situations while travelling on vacations, business trips, etc. Always make sure that you have the right comprehensive travel insurance covering all your needs against any mishap that can put you in an adverse financial situation. This insurance provides coverage against the following incidents:

• Personal accident
• Medical expenses
• Medical evacuation
• Loss of passport
• Baggage loss
• Trip delay
• Trip cancellations
• Loss of personal belongings.

Types of Travel Insurance

Travel insurance is broadly based on geography, traveller and validity.

1. Geography :
• Domestic Travel Insurance: This insurance is for those who are travelling within the country. In such cases, proper travel insurance will insure a person against loss of baggage, delay in flights or personal accident, among others.
• International Travel Insurance: Many insurance companies are now covering expenses like corona virus hospitalisation, loss of luggage, flight cancellation, flight delay and other journey-related risks so that you can enjoy your trip without any worry.
• Schengen Travel Insurance: Schengen travel insurance policy offers coverage in all the 26 European countries that belong to the Schengen area. Note that not all European countries are part of the Schengen territories. Schengen travel insurance is necessary to process the Schengen visa application. However, this should also be treated as a necessary safeguard while travelling and not just because it is mandatory.

2. Traveller :
• Family Travel Insurance: When you are travelling with your family it is better and easier to insure the whole family with one cover instead of insuring every member individually.
• Group Travel Insurance: This can be used when you are travelling with multiple people not necessarily from your family. Group travel insurance comes in handy and is hassle-free as compared to individual travel insurance. This is mostly opted for by travel agencies that organise tours.
• Student Travel Insurance: This is a policy for students who are travelling abroad for further studies. It offers comprehensive coverage in the form of expenses incurred on medical treatment, passport loss and other reasons leading to study interruptions.

3. Validity of Policy :
• Single Trip Insurance: Taking this insurance is beneficial to those who are not frequent travellers. This insurance may cover single one way or return travel as you choose.
• Multiple Trip Insurance: There may be a case when you travel a lot either due to personal reasons or for business. In such a case, taking multiple trip insurance makes more sense.

Policy Coverage

• Emergency Hospitalisation, Evacuation and Medical Treatment: No one can predict a medical emergency that may require hospitalisation in a foreign country. By having adequate travel insurance, you don’t have to be concerned about medical expenses as it will get covered under the policy. Emergency evacuation expenses are also covered such policies.
• Trip-Related Adversities: You may face adversities during your trip such as the cancellation of a flight due to some emergency or a delay of your flight. You get compensated if you lose any money due to delays or cancellations.
• Cashless Treatment: We do not visit a hospital when on a holiday, and if we have to do so due to some emergency then it can become a financial burden at the time of the trip. So, this type of insurance covers hospitalisation or provides medical treatment at an empanelled hospital of the insurer. You can get cashless service in which all your medical bills will get settled directly by your insurer.
• Coverage for Baggage or Passport Loss: On an average almost 4 million baggage items get misplaced or misdirected at airports every year other than those that get stolen. Not just that but tourists getting targeted by pickpockets at tourist locations is very frequent. In such scenarios it is beneficial to have travel insurance which insures your loss of baggage as well as passport.

Selecting the Right Insurance

Once you understand the importance of travel insurance and things covered in the policy, the next big question is how to select the right kind of insurance as there are a plethora of companies providing such a facility. You can take the help of some of the insurance aggregator websites and compare travel insurance quotes provided by different insurers, choosing the one that fits your needs. The following factors should be considered while comparing and selecting the right kind of policies required by you:

• Coverage Offered: Understand the purpose of your travel and the coverage you require and then choose a policy which has the required features.

• Flexibility: Travel insurance plans should be flexible enough to allow any changes in your travel itinerary before the journey begins and therefore look for flexible plans.

• Sum Insured: Choose an optimal coverage amount based on the destination you are travelling, the members’ travelling and the duration of your trip.

• Members Covered: If you are travelling with your family you should cover all the members travelling with you, including senior citizens who might need a separate policy.

• Claim Settlement Ratio: Higher the better as higher settlement ratio is favourable for you since it increases the probability of your claim being settled.

• Comparison: After considering all the above factors, compare the available plans offered by different insurance companies and then make your final choice.

Conclusion :
Travel insurance is often an overlooked investment until something unforeseen and untoward happens. Though the cost of buying travel insurance will vary on factors such as trip duration, travel destination and activities planned, it normally ranges from 4-12 per cent of the cost of the trip. Travel insurance helps to travel worry-free and protects you against any unwelcome expenses such as flight delays and medical emergencies. This is particularly true in the current situation when we are going though once-in-a-century pandemic. This kind of insurance gives travellers peace of mind and financial protection against the risks of travel.