Money
Why buying travel insurance may not be a good idea for all trips
Summary
For domestic travel, shelling out extra on a comprehensive policy may not be advisable if you have medical insurance. In fact, travel insurance for domestic travel makes sense in specific scenarios.Flights are booked, itinerary is planned and sunscreen is packed! But have you bought travel insurance to protect against a flight delay or an untoward accident wrecking your upcoming summer holiday? This protection comes at a fraction of the overall travel cost, especially in the case of international vacations.
Basic vs comprehensive
Travel insurance policies come in two forms – basic and comprehensive. The former covers trip cancellations, like flight delay or cancellation, missed connecting flight, baggage delay or loss, passport loss and maybe a small sum insured for medical expenses.
A comprehensive policy offers wider coverage in the form of allowance during hospitalization, medical emergency evacuation, personal liability and reimbursement when the policyholder cancels the trip.
Take note that a basic plan in most cases reimburses for a trip cancelled by the policyholder only on grounds of them or a co-traveler falling sick or death of an immediate family member. A comprehensive policy allows cancellation for other reasons like unfavourable weather or political unrest. Very few travel insurance policies in India offer “cancel for any reason" feature.
Needless to say, a comprehensive cover costs more and in the case of international policies, the difference in premium could be as much as 100-150% higher.
Also read: Travel insurance: How to decode policy fine print
For domestic travel, shelling out extra on a comprehensive policy may not be advisable if you have medical insurance. In fact, travel insurance for domestic travel makes sense in specific scenarios.
When to buy in domestic travel
For domestic trips, it would be better to buy a policy that covers flight delays and cancellations when such incidents are inevitable.
For instance, in the months of December and January, flight disruptions are a common occurrence in Northern states. However, at other times, check whether your credit or debit card offers baggage loss, delays or even flight disruptions as a built-in perk.
The coverage may be small compared to a standalone policy, but the risk is also smaller, so you should evaluate whether the premium is worth the risk.
Moreover, in some cases, when you upgrade flight tickets through loyalty programmes, features like free change of flights or cancellation at a small fee are some additional features that you may inadvertently get.
Also read: Explained: The importance of travel insurance in a shrinking world
Similarly, some online travel aggregators allow full refund (net of taxes and convenience fee) on cancellation at a small fee of ₹50-200. Opting for this would be better over buying a travel policy if you only want to protect your flight cost against cancellations as this allows you a no-questions-asked cancellation and at almost half of the travel policy premium cost.
International travel
For international travel, buying a comprehensive plan makes sense in the majority of cases. Even if you have booked a refundable flight or hotel, you may still want to cover against medical emergencies.
It is advised that for international travel, you must pick a policy that covers pre-existing illness and have minimal exclusions for trip cancellations and missed connecting flights.
"Travel insurance policies commonly exclude coverages for pre-existing medical conditions unless specifically stated in the policy. One should read the policy documents carefully and understand the scope of coverage and exclusions before buying a travel insurance policy,'' said Vivek Chaturvedi, CMO and Head of Direct Sales, Digit General Insurance.
