Travel Insurance: Top 6 reasons to buy Travel Insurance

Travel Insurance
Travel Insurance

What is travel insurance?

Travel insurance is a type of insurance which covers the risk/damages occurred in the duration of the travel of the insured person. Common risks that travel insurance covers is Loss of baggage, Delay of baggage, Medical cover, Trip cancellation.

Travel insurance can be bought for any type of commute that is if you are traveling in flight, trains, bus, or cars.

Travel insurance is two types Domestic and International. Most of the risks we are discussing below are related to international travel insurance.

In India, we do not have much awareness of Insurance and its benefits. So, obviously travel insurance is given very low priority in the hierarchy of insurance types.

What risks Travel insurance covers?

The travel insurance covers Life risk, Trip cancellation, Loss of baggage, Delay of Baggage, Overseas hospitalization, and repatriation.

So, if we buy travel insurance before we travel and if something happens unexpectedly then the insured amount will be paid by the insurance company..

Life Risk

During the trip, if any accident happens and the insured is dead then the amount is paid to the nominee.

Trip cancellation

If the trip is canceled for unforeseen reasons, then the agreed amount will be paid to the traveler by the insurance company.

Sometimes the traveler misunderstands this type of cover, they think that the amount is paid even if they cancel the trip. But that is not the case. The insured amount is paid only if the trip is canceled by the trip operator.

Some insurance companies give coverage for trip cancellation for any reason, but this costs a lot if you want to take this type of cover check with the company beforehand what reasons exactly, they cover.

But there are also exceptions to the above rule if the insured gets hospitalized or in case of insured death or in case of insured immediate family members death then the insurance company will pay the insurance amount.

Also, there are some exclusions to this type of cover. For example if the trip is canceled by the government or the air transport authority.

Here is a list of other exclusions one of the insurance companies applies.

Travel Insurance: Trip Cancellation exclusions
Travel Insurance: Trip Cancellation exclusions

Delay of baggage

If the traveler’s checked-in baggage is delayed in reaching the destination within the specified time, Then the traveler will be paid the money by the insurance company.

There are certain exclusions in covering this kind of loss, for example, the insurance company only pays if the whole baggage is delayed which means if you have checked in 4 bags and 3 have arrived and one arrived late, then you won’t get paid for the one bag.

Below is an example of a list of exclusions that one insurance company applies.

Travel Insurance: Delay of baggage - Exclusions
Travel Insurance: Delay of baggage – Exclusions

Loss of Baggage

You have reached your destination and found out that your baggage is lost.

In this situation, the company will pay you the amount that is agreed upon in the insurance document. Insurance companies pay out the full amount if you lost all the bags, or if you lost only some items then they opt to pay only for the items you lost.

The insurance company normally pays for the value of the lost baggage (max is the agreed policy limit) and the items inside the bags.

This cover applies to checked-in bags as well as cabin bags.

There are certain limitations to this cover for example.

Travel insurance: Loss of baggage exclusions
Travel insurance: Loss of baggage exclusions

Repatriation of remains cover

Travelers who travel abroad I strongly recommend having this cover in their travel insurance.

We never know what will happen in an unknown country, one can die from illness/accident or any other reason. In these situations, it is very difficult to transport the dead body to the home country. It is very expensive.

We have seen such incidents where some students or professionals travel abroad and unfortunately, death happens there. After that, it becomes very hard for their family to bring that person’s body home. As it is very costly, only one family member goes to that country and decides to complete the final rituals there only.

So, it is important for all of us to give some relief to our family members at least by taking this cover.

I understand that no one likes to discuss this kind of situation, but this is reality and life is not always as expected.

So, while traveling abroad this cover is a must to have.

Overseas Hospitalization / Medical cover

What if you fell sick and hospitalized for a couple of days while traveling to the USA? Imagine the hospital bill you must pay when you discharge. It is estimated that the average hospitalization cost per day in the USA is 3,949 Dollars.

Travel Insurance: Medical cover - Estimate - wiki
Travel Insurance: Medical cover – Estimate – wiki

You can simply estimate how much burden it will be on us when paying this bill. So, to avoid this type of unexpected expenditure and running into a debt hole, having the medical cover is a must while traveling abroad.

Coverage in the country of residence

Some insurance companies even pay the insured for the treatment costs that occurred in the home country. Yes, you read it right.

For example, Mr. X traveled to Europe and he bought travel insurance. Unfortunately, within a couple of days he landed in Europe, he got very ill and when checked with a doctor he is diagnosed with some serious illness. Now Mr. X has two options. One, he can get treatment in Europe or he can return to home country and get treated.

Now, Mr. X chose to go back to the home country, but he was not sure if the treatment is covered in the insurance. So, he called the insurance company to check the same. They told him he is covered for 30 days of treatment from the date of his landing in the home country. This is a big relief for him as he can treat at home and his near dears will be with him during that hard time.

Coverage of medical evacuation

Insurance companies normally cover the costs incurred for the transportation of the patient to the hospital.

If we had to call an ambulance in an emergency during our trip in a foreign country. And we get transported to the hospital in that ambulance, and the amount will be paid by your insurance company.

Exclusions of medical cover

The very important exclusion to remember is, most of the insurance companies do not cover the treatment costs for the pre-existing illnesses.

Here is an example of the exclusion from one of the insurance companies.

Travel Insurance: Medical Cover - Exclusions
Travel Insurance: Medical Cover – Exclusions

How to claim travel insurance?

Ok, so far, we discussed the importance of travel insurance, different types of risks that travel insurance should cover, etc.

Most of us might have already traveled abroad and bought travel insurance but never might think about claims.

Now let us look at the claim process.

Since we know that the travel insurance covers a different types of risks, let’s check the claims process by risk.

Medical claim:

In the case of planned hospitalization, the insurance company directly pays to the hospital. So, in this scenario, no claims are submitted.

If we want to claim/reimburse the insurance after the treatment, then below documents need to be submitted

  • Transportation (Ambulance) details. If used.
  • Bills for consultation / treatment
  • Prescription

Loss of baggage claim:

To claim for the loss of baggage below documents are required

  • Statement of loss of baggage and details of the incident
  • The irregularity report/ delay report issued by the carrier.
  • Voucher of the carrier for the compensation paid for the delay.
  • Documents related to any communication i.e. emails etc between the carrier and insurer.

Delay baggage claim:

In case of a delay in total baggage or part of the baggage, we can claim the insurance. To avail, the insurance for this type of risk below documents are required

  • The irregularity report/ delay report issued by the carrier.
  • Voucher of the carrier for the compensation paid for the delay.
  • Documents related to any communication i.e. emails etc between the carrier and insurer.

Trip cancellation claim:

Trip cancellation can occur in two ways, canceled by the carrier, or canceled by the traveler/insurer.

If the full trip or part of the trip is canceled by the carrier below documents are required for the claim

  • Confirmation of the cancellation of the trip from the carrier.
  • Original used ticket
  • Original bills or receipts from the hotel if any accommodation is booked.

If the trip is canceled by the insurer, below documents to be submitted for claim.

  • A declaration describing the situation, why the traveler is compelled to cancel the trip
  • Medical evidence in case of personal contingency.
  • Original bills or receipts from the hotel if any accommodation is booked.
  • Used air ticket in case a part of the trip is canceled.

Repatriation claim / arrangement:

When we take this cover as part of insurance, share the insurance details with your family members. In fact, it is a good practice to share/send the documents related to any type of insurance that we buy, life insurance/term insurance/travel insurance.

In the case of repatriation of remains, the family members of the deceased should contact the insurance company with certain documents. Death certificate, travel details, cause of death, etc.

Selecting the best travel insurance

Now I hope you understood what are the different types of risks that we face during our travel. So, when selecting travel insurance, you need to keep all these things in mind and choose what best suits you.

Like I said above, even if you do not take overage for baggage, trip cancel risks I strongly suggest you take coverage for medical risk and repatriation.

Once you think your insurance company is covering for all the risks that you wanted to be covered for, then look for the cost. Whichever is cheaper to buy it.

Oh, another factor to consider while buying travel insurance is the claim process. Check how easy the claim process is for that insurance company. Most companies provide this information on their websites https://www.icicilombard.com/docs/default-source/Policy-Wordings-product-Brochure/international-travel-insurance-policy-wording.pdf or you can call them directly and they will send you that information to your email.

So, here are the things to consider while buying travel insurance

  • Risks covered under the insurance
  • Cost of the insurance
  • Claim process

Domestic travel insurance

The domestic travel insurance covers the same risks that international travel insurance covers only difference is the travel is within the country.

This also applies when we are traveling by Bus, Train, and taxis.

As we are aware, in India when we are booking a train ticket the IRCTC allows us to select an insurance cover for that trip.

Also, when we are booking private buses, they also include travel insurance in the booking.

Uber and Ola’s taxis also give the option of selecting the insurance for that trip.

Best website to check for travel insurance

https://www.eindiainsurance.com/india-travel-insurance/popular-travel-destinations.asp

I am a certified insurance broker. I am a passionate blogger mainly focusing on insurance. I intend to create or increase the awareness of importance of insurance in India by writing useful blog posts. Also i write my blog posts in a simple language so that the readers do not overwhelmed by the terminology that is being used in insurance sector.

5 thoughts on “Travel Insurance: Top 6 reasons to buy Travel Insurance”

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