Travel insurance: A safety net when you fly

While booking travel tickets, most of us uncheck the ‘buy insurance’ box or decline to buy travel insurance from agents because it costs extra money. It is good to be optimistic that nothing can go wrong, but it could get really troublesome if things do go wrong, especially on foreign soil where help is difficult to get. It, therefore, makes sense to buy protection against all kinds of disasters that can strike during travel.

Although travel insurance is not mandatory, it is highly recommended. If you fall seriously ill while travelling, these covers can save you a tidy sum, given the sky-high hospitalisation costs in countries such as the US and Canada. Also, it is best to carry a travel cover if you are planning a vacation with a bawling infant or a toddler in tow.

Delay in receiving baggage or, worse, loss of baggage, can throw all your carefully laid out plans in jeopardy, especially if you are travelling for an occasion that has a specific dressing protocol. However, if you have travel insurance, you can use the money to go on a shopping spree to put together a dandy wardrobe.

Despite these obvious advantages, many people do not opt for travel insurance as it is not mandated for travel within India and in (some) foreign countries. Some people are simply not aware of it. The importance of travel insurance is realised only when one goes through a hard time. For instance, this January,, more than 100 flights were delayed at Delhi international airport due to dense fog. In another scenario, several passengers were injured in the recent Nepal flight crash. While one cannot avoid such situations, travel insurance could mitigate the financial inconvenience, if not the emotional trauma.

What’s on the menu

Unlike covers for life and health, purchase of travel insurance is by far the easiest. You can buy it even few hours before your travel. The choice of insurance depends on the travel destination and the duration of travel.

According to industry experts, not many people opt for domestic travel insurance as they could be holding a health and personal accidental cover that can be used during medical emergencies. But if you want to insure yourself against loss of baggage, flight delay and cancellation or delay in receiving baggage, it would be best to go for a comprehensive travel insurance for domestic travel too.

Domestic travel insurance can be bought online or offline through airlines, travel aggregators/agents, insurance companies’ portals, insurance aggregators, and so on. It is recommended that travel insurance be bought irrespective of the place of travel — for both domestic and international use. Frequent travellers could find a travel cover particularly handy, given the regular delays in flights/trains.

For international travel, travel duration plays a crucial role in deciding the insurance; whether you are making a single trip or multiple trips throughout the year. In case of a single trip, the maximum policy period is usually six months, although it may vary with insurance companies. These single trip plans are suitable for individuals going abroad for a specific period — on a vacation, graduation of a family member or for any other purpose. A multi-trip policy is usually valid for a year. The customer has to pay the premium only once and gets to undertake as many trips as he/she wants, within the policy period.

There are travel plans specifically tailored for students going abroad for studies. The policy period can vary from one month to a year or it can cover the entire duration of study. The basic cover takes care of medical emergencies during the travel and while the student is abroad, baggage loss, trip delay, flight cancellation, and so on. Most student travel policies come with a sponsor cover, wherein, if the sponsor of the policy (parent or guardian) is no more (during the period the policy is in force), the insurance company would cover the tuition fees for the student. Other covers include family visits, loss of laptop and tuition fee repayment on behalf of the student (in case the study is interrupted or discontinued, the insurer will reimburse the tuition fee so far paid).

There are also other types of travel insurance plans specifically targeted at some sections of the population. For instance, many general insurance companies provide senior citizen travel policies where they enjoy the same benefits (as other plans) such as emergency medical expenses cover, personal accident, daily hospitalisation allowance. Similarly, you can also buy one travel insurance for your entire family and all sections of the travel policy would be on a floater basis. Normally, family will include self, spouse and two children.

 

 

Know your policy covers

Once you know the type of travel insurance to take, all you have to do is buy one. Almost all general insurance and (few) standalone health insurance players offer travel policies. Since there is a greater need for insurance during international travel, let’s consider what’s on offer there.

A basic travel insurance plan — whether for a single trip, multi-trips and other options — will cover certain key medical and non-medical expenses. In medical or health-related covers, all travel policies provide cover for emergency medical expenses, personal liability expenses (it covers expenses due to injury to third-party or damage to that person’s property), personal accident cover, medical or emergency evacuation, cash on hospitalisation or cash in emergencies such as if you get robbed or you have to go through some dental treatment. The premium to be paid will differ depending on the players and policy cover opted.

Non-medical covers include payments for baggage delay, loss of baggage, loss of passport, trip delay and cancellation, repatriation of mortal remains and getting hijacked. In addition, there are covers for home burglary, hotel change or hotel upgrade and trip curtailment.

Premium rates vary across players, so you need to be careful in choosing the best rate. For instance, ICICI Lombard charges premium of ₹1,178 (including tax) for single trip for an individual for a cover of $1 lakh. This plan provides medical and non-medical covers. On the other hand, Bajaj Allianz General Insurance charges ₹1,377 (excluding tax) for a cover of $2 lakh — single trip for an individual. In addition to the basic covers, the company also gives home burglary insurance between ₹1 lakh and ₹3 lakh, if your home is burgled while you are away, and covers expenses for hotel change or upgrade to a superior class in a hotel.

You should also look at what’s covered. Consider this, flight delay is not covered by companies such as New India Assurance while Star General Insurance provides up to $150 ($25 per hour) and Religare Health Insurance gives $500 maximum for delay beyond 12 hours.

A policy holder has to fulfil certain conditions to get the claim. For instance, loss of checked-in baggage will be covered only if you had lost it while in custody of common carrier (commercial transport flying on regular routes at agreed rates). There are other caveats that could be hidden in the fineprint. The insurance company deducts a certain amount before paying the claim in certain cases. In case of emergency medical expenses, for instance, some insurance companies insist a deductible--an amount of say $100 to be borne by you.

On a cautionary note

Before deciding on the travel insurance, read the exclusions — what will not be covered by the insurance company. Also, read the policy document carefully to understand how much of the claim will eventually be settled. For instance, if there is an accident that leads to permanent loss of hearing in both ears, ICICI Lombard Travel Insurance pays only 75 per cent of the sum assured as part of personal accident cover. The settlement amount could vary with insurers, but you should be aware of this gap.

Similarly, look for the extent of premium repayment in case of policy cancellation. ICICI Lombard will not allow cancellation unless the unexpired period of the policy exceeds 30 days. On the other hand, Bajaj Allianz deducts cancellation charges of at least ₹250 and the refund of the premium depends on how soon you return from your travel. Therefore, read the policy document carefully to avoid hassles at a later date.

Simply put, travel insurance is your plan B, if all your best laid out plans for the trip go awry.

Interview

‘Claims are settled within a maximum of 7 working days’

Policy holders generally have a lot of questions on the procedure to be followed in invoking international travel claims. Sanjay Datta, Chief Underwriting, Claims and Reinsurance, ICICI Lombard General Insurance, in an interview with BusinessLine, elaborates the steps involved in settling the claims.

Sanjay Datta, Chief Underwriting, Claims and Reinsurance, ICICI Lombard General Insurance

What is the procedure to invoke a claim?

The procedure for claim is fairly simple. The best mode is to go through the international assistance centre. The contact numbers are given along with the travel policy document and people are available 24x7 for assistance across the globe. But providing for assistance will depend largely on the type of claim a policy holder initiates.

With ICICI Lombard, we have what are called ‘alarm’ centres. A policy holder can reach out to these centres by giving the policy number, and we can provide services such as consultation, if required, or medical assistance.

In any case, you can either call or register your claim online. For instance, in the case of lost baggage, you can either make the claim immediately in the foreign country or on return to India, after which the insurance company will compensate you.

How are emergency medical expenses covered?

There are two types of medical emergencies. One, when an individual consults a doctor as an outpatient and then decides on the treatment. This is common in the case of a fracture or some minor surgery or severe stomach-related ailments. Two, when the policyholder has to be hospitalised. In such cases, we could guide him to a hospital or he could go to a hospital of his choice. The assistance centre activates the claim to make it cashless.

The insurance companies provide guarantee of payment to the hospital and the expenses are borne by the company. Both pre and post-hospitalisation expenses will be taken care of by the insurer. However, if the expenses are minor or the injury is minor, the policyholder can bear the charges and make the claim later. These services can be got only in the case of emergencies and not for a routine check-up.

If the policyholder had met with an accident, the insurance company will compensate him/her. This is personal accident cover — it is a benefit amount and not a reimbursement. However, there are various clauses associated with personal accident claim, such as loss of toes or loss of hearing or permanent disability. But if there is a claim arising out pre-existing medical condition, it will not be covered by the travel policy.

When can a policyholder claim for personal liability?

Personal liability is when a policyholder has to meet the expenses or compensate a third-party due to bodily injury or damage to property. That is, for example one could have met with an accident while driving, causing damage to someone else’s car or property. Then, you are liable to bear the expenses and the insurance company will cover those expenses. This is not to be confused with breaking the laws of a country.

No insurance company will provide cover for that. Personal liability claim basically helps meet your expenses of, say, a lawyer’s fee. The claim for this will be settled immediately or reimbursed later.

What about claim for non-medical expenses?

Non-medical expenses include baggage loss or baggage delay, flight delay and cancellation and hijack-related expenses. In the case of baggage claim, the standard procedure is to make the claim on return to the home country; however, immediate settlement is made, depending on the circumstances of policyholder.

A policy holder has to submit certain documents that include a report from the common carrier on the baggage lost or delay, statement furnishing details of the items in your baggage and voucher from the common carrier regarding compensation due, whether paid by the carrier or not.

Upon flight cancellation due to contingencies, the claim is settled immediately to the policyholder. One can reach out to the assistance centre to start the claim procedure.

How many days does it take to process a claim?

Normally, claims are settled within a maximum of seven working days. Claim after the deductible, wherever applicable, is paid back.

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