Roughly 4.5 lakh travel insurance policies worth approximately Rs 110 crore were sold in 2014. This is likely to have doubled to over Rs 220 crore in 2015, said Yashish Dahiya, cofounder & CEO, PolicyBazaar. Nearly, Rs 40 crore worth of policies were sold online.
Despite this growth, penetration of travel insurance is still quite low. Even though 90% of people are aware about it, only 20% opt for travel insurance when they hit the road, industry sources said.
“Travel insurance is considered an expense and a waste of money, even though it provides an extensive range of benefits for travellers. To some extent, lack of awareness and guidance are reasons why people do not buy it,” said Anjali Gupta, Director, Y Not Travel. The Indian Travel insurance market is worth approximately Rs 240 crore, according to Ravi Menon, vice president Foreign Exchange, Cox and Kings.
Travel companies say very few people purchase insurance for `global calamities’ but most of them go for general travel insurance which cater to essential needs like medical expenses, medical evacuation, loss of baggagepassport, delay of baggage. According to experts, around 60% of travel insurance policies provide cover for `terrorism’ but schemes may vary . For example, in cases like the Paris attack, the insurance company will step in to offer the entire medical expense of an Indian guest. They will also pay for flight tickets back home on completion of the treatment. However, the guest will not get monetary compensation in case of partial, permanent disablement or death as those come under liability covers where the guest will have to file a claim with the government of that country to claim compensation, Menon told ET.
In case of natural disasters like floods, earthquakes or an epidemic, mostly all travel insurance policies cover the insured for any financial loss incurred during such natural disasters or a medical emergency . However, it is always advisable to refrain from travelling to places where contingencies are foreseen or expected, said Sanjay Datta, Chief-Underwriting and Claims at ICICI Lombard.
“Also, in cases where such incidents of natural disaster or epidemic or terrorism are reported, an emergency crisis team is formed to provide dedicated assistance services such as medical treatment, medical evacuation, repatriation, emergency cash advance and similar services to such insured,” he added.
Post natural calamities, more travellers start opting for travel insurance thus benefitting the insurance companies in the medium to long term, Dahiya of PolicyBazaar said.
“In the short-term, travel insurance companies will have to compensate for the claims but it will be profitable in the medium-term as premiums will go up but since probability for such emergencies is only 1%, people will continue to buy travel insurance due to uncertainty,” he added.