How does travel insurance work?

Posted by neha sharma on May 8th, 2019

Travel insurance is a type of insurance policy which covers the risk of loss, damage, injury occurring while the policyholder is travelling. This insurance is for a specified period of time. It can either be a single trip insurance which covers travelling risks for one single trip, or it can be multiple trip insurance which covers these risks for one year with multiple trips. Multiple trip insurance generally benefits business travellers and long term travellers who travel frequently. The condition for multiple trip insurance is that each trip should not be longer than 30 days. However, some insurance companies extend this to 60 days.

Travel insurance covers a wide range of risks such as:

• Accidental death and dismemberment
• Accidental death and dismemberment benefit for common carrier i.e for carriers such as airplanes, trains, buses which carry more than one traveller
• Accident and sickness medical reimbursement
• Permanent disablement of the policyholder
• Hospitalization daily allowance i.e hospital cash
• Sickness dental benefit for dental treatment
• Emergency medical evacuation
• Repatriation of remains
• Baggage Delay
• Loss of checked baggage
• Loss of passport
• Personal liability
• Flight delay
• Flight Hijack
• Emergency cash advance
• Fraudulent charges on card
• Home burglary
• Trip cancellation
• Trip curtailment
• Missed connection/missed departure
• Bounced hotel/airline booking
• Difference in airfare due to delayed or early return
• Personal accident cover in India

The premium for travel insurance is generally decided based on the accident and sickness medical reimbursement benefit. Insurance companies offer different plans based on this amount.

The different types of travel insurance are:

• Individual travel insurance for solo travellers
• Family travel insurance covering travelling risks for the entire family
• Student travel insurance which covers the risk for a student

Apart from this, depending on the location, travel insurance can be classified as:

• Domestic travel insurance for travel within India
• Asia travel insurance for countries within Asia
• Schengen insurance covering the Schengen countries
• Entire world excluding Americas which excludes South and North America
• USA and Canada

The premiums for each location are different based on the assessed risks of travelling to that region.

A travel insurance policy excludes:

• Hospitalization due to pre-existing diseases
• Any medical emergency in case a trip is taken without the doctor’s permission
• Pregnancy, childbirth or any complications arising from pregnancy
• Loss when due care is not taken by the policyholder
• Any work where the policyholder works in hazardous or dangerous conditions
• Any experimental treatment or any non specified treatments
• Any medical expense after the policy lapses is not covered

What to do in case of loss or hospitalization?

In case anything happens during travel, one thing that has to be done is to contact the insurance company as soon as possible. Insurance companies provide 24x7 support for the policyholders. The next thing is to check the policy document or the insurance company’s website for network hospitals. These are hospitals that have an agreement with the insurance company. Getting treatment done in a network hospital will mean cashless treatment since the insurance company will pay the treatment costs directly to the hospital.

In case the company has no network hospitals, you can get treated at any hospital and then get the treatment costs reimbursed from the insurance company. In case of other losses, you will need to raise a claim with the insurance company after the trip is over. However, some insurance companies have an online claim process where the claim can be raised online.

How to buy travel insurance:

It is very easy to buy travel insurance online. These policies can be bought directly on the insurance company’s website or through an insurance aggregator. Before buying the policy it is important to compare the inclusions in the policy and the insurance company’s claim settlement ratio before opting for the policy.  

Author bio:

Neha Sharma is a finance student who loves to write in her free time. She has spent considerable time researching about travel insurance. Through her work, she has mentioned the risks it covers and its different types