Insurance important for domestic travel

Besides medical expenses, it provides for extended stay and evacuation in case of natural calamities

After the recent floods in Jammu & Kashmir led to widespread devastation, tourists who sought to return from that state were asked to pay higher charges for airline tickets, according to reports. These were costs the tourists could have avoided if they had travel insurance policies.

K K Mishra, chief executive of Tata AIG General Insurance, says the penetration of domestic travel insurance is quite low. “The attitude among people is nothing untoward will happen to them in their own country. In case of foreign travel, many are forced to take insurance, as this is compulsory in some countries. For instance, you will not get a Schengen visa (which allows travel between 25 European countries) till you have insurance. For travel to the US, people take this because medical costs there are very high,” he says.

In case of group tours, operators buy insurance policies for any unforeseen expenditure. But this is usually in the case of international travel.

The premia for domestic travel insurance aren’t very high — between Rs 150 and Rs 2,000, depending on the tenure and coverage. Mishra says for regular travellers, there are annual insurance policies. “If you buy annual insurance, the rates will be cheaper. For those who travel regularly, annual insurance is advisable,” he says.

The shortest duration for which one can buy travel insurance is seven days. For an annual policy, which allows unlimited trips of less than 30 days each, the premium is Rs 2,687 — Rs 1,790 for the core product and Rs 897 for the add-on.

Such policies offer a number of benefits. First, medical insurance, which covers expenses incurred on hospitalisation due to illness or an accident, is part of travel insurance. This will be covered if you have a regular medical insurance policy. Other expenses covered by travel policies include costs on missed flights or delay in flights, alternative accommodation, misplaced baggage, and evacuation in case of an accident due to natural calamities. In addition, these policies offer additional amounts for accidental death, transportation for family and accommodation for extended stay.

Given the rising popularity of adventure sports such as motor rallies, bungee jumping and rafting, insurance companies offer policies for such holidays, too, albeit at higher premia. Accidents or death resulting from these sports aren’t covered under a basic travel policy. Add-ons include home insurance coverage (to protect your house while you are travelling) and daily cash reimbursement in case of hospitalisation. The higher the number of add-ons one opts for, the higher the premium.

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