Deciding on a holiday destination, and booking hotel and flight tickets are by far the most exciting part of travel. But, buying travel insurance is seen as a necessary evil, done without much thought. Or worse, ignored altogether. Let's face it - travel insurance was never a scintillating topic by any stretch of imagination and eyes were bound to glaze over at any attempt at discussion. That's until Covid19 struck last year. And then, it was a mad scramble to decipher the fine print.
Predictably, travel took a nosedive in 2020 and has continued to be a dream into the first half of 2021. But, it is only a matter of time before it opens up. So the big question is whether travel insurance is worth it? In a word, absolutely. Now more than ever.
Why is travel insurance important now?
Even before the pandemic, the travel insurance market in India accounted for Rs 595 crore to Rs 814 crore depending on who you chose to believe. It covered a combination of aspects like personal accident, medical expenses and medical evacuation, emergency dental pain relief, repatriation, loss of checked baggage, accidental death and disability, loss of passport, hijack cover, trip delay, delay of checked baggage and such others.
But the spate of cancellations, be it flights or hotel bookings, with the onset of the pandemic put the spotlight on travel insurance. "There has been huge interest and people are very particular in the details," says Dev Karvat, Founder and CEO of Asego, India-based company which offers global travel assistance and insurance.
"Travel insurance was always bought because it is a statutory requirement for visa. In reality, not much attention was paid to it," says Srikala Bhashyam, Managing Partner of Bangalore-based RS Consultants, a wealth management firm.
But there has been a dramatic shift considering that nearly 80 percent of travellers chose not to buy travel insurance that wasn't mandated by visa requirements. "This shift became evident soon after the pandemic hit, when only a handful of countries were allowing Indian travellers, such as Maldives and Dubai. Nearly 70-75 per cent of travellers purchased travel insurance which was a huge increase; it used to be only around 10 per cent," he says.
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"I've always bought travel insurance for six months at a time with fairly comprehensive cover since I also drive," said Anil Nagendra, director at Bangalore-based Ngenux Solutions Limited, an Artificial Intelligence and Data Science company, who travels abroad frequently for work. "I haven't travelled since the pandemic but once I start, I will get as much of a broad policy as I can get since everything is so expensive and I would like every emergency covered," he said.
Will my travel insurance offer Covid19 cover?
Yes and no, but this in no way should negate buying travel insurance. Since the pandemic hit, insurance providers are quickly rolling out cover for various Covid19 provisions, from hospitalization to repatriation, to quarantine and hotel stay for family members, change in flights etc. But there is a lot of fine print and policies cover only certain conditions. For example, cover for trip delays and cancellations is dependent on the date of purchase, date of travel ban imposition, and such other factors.
However, depending on the provider, this is an indicative list of Covid19 covers that are now being offered.
- Trip delay
- Trip cancellation or interruption (if insurer or family member is hospitalized due to Covid-19)
- Missing connecting flight
- Evacuation in case of catastrophe
- Emergency hotel extensions
- Bouncing of hotel/airline booking
- Overseas hospitalisation coverage, for both in-patient and out-patient expenses incurred due to Covid-19 in destination country
- Daily hospitalisation allowance, in case of hospitalisation due to Covid-19.
What are the pertinent questions to ask?
"It is very important to ask what a policy covers, especially the basics, as well to check for individual concerns, like if co-morbidities are covered or eye care or dental issues are included. It is also helpful to ask who the insurance partner is in the country of travel and to keep helpline numbers handy," says Bhashyam.
Karvat says there are a few main aspects to consider. "One of the biggest criteria is the age factor. Requirements may vary significantly for those above 60 years as for those below," he says.
Foremost is the health and medical emergency angle, which could include accidents, health emergencies and hospitalisation. Then there is personal safety such as robbery, mugging etc. A third angle is protecting one's money in terms of flight and hotel cancellations, delays, misuse of credit card etc. "It is important to make sure there are ancillary services included such as road side assistance or just access to someone to talk for information regarding various things," says Karvat.
Having said that, he says it is important to consider the trip. People travel for different reasons. So people travelling for adventure will need different set of covers than say a senior citizen. "So ask relevant questions and make sure you have everything covered," says Karvat.
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Finally, some important tips.
"If travelling for long periods, say like six months to the USA to be with family, it is better and more logical to get a local policy. Make sure the policy is for a few days more than the period of travel just to factor in unforeseen circumstances. And make sure existing policies are renewed before the expiry date," says Bhashyam
"It is usually the practice to get a generic policy but a one-size-fits-all insurance policy is not desirable. Ideally, policies should be comprehensive and flexible and designed according to the needs of the customer. We have 7-8 standard templates, but offer as much 50 pick-and-choose options. In the end, the customer has to benefit," says Karvat.