From bomb threats to cancellations: How travel insurance can protect flyers

India's aviation sector found itself in a tizzy this October as a string of bomb threat calls disrupted both domestic and international flights. Though each call ultimately turned out to be a hoax, the threats triggered delays, flight diversions, and heightened anxiety among passengers. When unexpected security issues arise, travellers often wonder about their rights and how travel insurance can help them.

 

What options do passengers have during delays?

 

During such disruptions, airlines are expected to provide refreshments and, if needed, accommodation, as outlined by the Directorate General of Civil Aviation (DGCA). According to DGCA guidelines, the airlines must offer meals, an alternative flight, or a full ticket refund in cases of delay. If delays extend significantly, hotels and transfers may also be arranged. However, this relief does not apply when the delay is caused by extraordinary events, such as bomb scares, which are beyond the control of the airline.

 

Does travel insurance cover bomb scare delays?

 

Passengers holding travel insurance, particularly for international trips, may be able to claim compensation for delays or cancellations caused by security incidents like bomb scares. “Whether travellers can claim a refund for delays or diversions due to a bomb scare depends on their specific terms and conditions,” said Priya Deshmukh, head of health products at ICICI Lombard. Deshmukh added that many policies cover trip interruptions due to unforeseen events, including security threats, though this varies by policy.

 

ICICI Lombard’s travel insurance policies include "trip cancellation and interruption cover," which provides compensation for pre-booked travel and accommodation in case of terror-related incidents at the departure, destination, or a scheduled stop. Additionally, the insurer’s Trip Delay cover reimburses costs incurred if a delay extends beyond specified hours, offering a safety net for disrupted plans.

 

For instance, ICICI Lombard’s offers several types of travel insurance with varied coverage amounts:

 

Trip cancellation and interruption: Coverage up to $500, with premiums depending on the selected plan.

 

Trip delay: Coverage up to $500.

 

Emergency hotel extension: Coverage up to $5,000.

 

Hijack distress allowance: $125 per day, up to 7 days.

 

Travel insurance benefits for unexpected security threats

 

Travel insurance policies commonly cover these situations:

 

Emergency hotel extension: Covers extra lodging costs incurred during extended delays due to security threats.

 

Hijack distress compensation: Provides a fixed payout if a flight is hijacked.

 

Automatic extension of insurance: Ensures the policy extends automatically if the trip is prolonged due to an emergency, maintaining protection for the insured.

 

While international travel policies often include high overall sums assured, specific trip delay coverages may range from $50 to $1,000, depending on the plan. Domestic travel policies generally provide lower cover amounts, between Rs 500 to Rs 1,000.

 

“Earlier, policies would issue payouts only after verifying delay reasons. Now, products cover the full amount for flight delays without inquiring about the cause, aiming to ease the inconvenience policyholders face,” said Amrish Dubey, vice-president of travel insurance at Tata-AIG.

 

Limitations and exclusions to keep in mind

 

However, not all disruptions are covered. Deshmukh pointed out that policies often have exclusions, such as denying coverage if the insured individual has a role in causing the incident or if a government restriction prevents travel. He noted, “These limitations are crucial to review closely, as they define the boundaries of coverage in specific high-risk scenarios.”

 

Deshmukh recommends looking for options like Hijack Distress Coverage and Cancellation for Any Reason (CFAR) policies, which offer refunds for cancellations beyond standard coverage. “This flexibility empowers customers to handle unforeseen events with peace of mind and financial security,” she explained.