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From Last March 2020 vs. This March 2021, what has changed in the travel insurance industry?

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Published on April 22, 2021. EST READ TIME: 3 minutes

“Should I buy the travel insurance?” is a question we frequently ask ourselves when planning trips, but we don’t usually know where to start or what coverage to choose. In most cases, this ambiguity dissuades us from taking travel insurance. Especially, in cases where it was not compulsory to purchase one. This was true prior to 2020. The Covid-19 pandemic, on the other hand, caused massive changes in the travel industry, including a newfound appreciation for a solid travel insurance policy. Let us learn more about how this shift occurred.

March 2020 to March 2021: The Travel Scenario

March 2020 saw the beginning of travel bans, extended lockdowns by governments all over. The COVID-19 pandemic in 2020 dealt a crushing blow to the travel industry. From thousands left stranded during lockdowns to being forced to travel during the pandemic, the experiences of travellers have been nothing short of terrifying.

Although the travel situation improved as 2020 progressed, the risk of contracting the virus was and remains high. Travelling to nearby and distant destinations has begun; however, the situation we are in necessitates that we take every precaution possible.

As the travel industry recovers from a pandemic-induced slump, travel insurance companies are taking measures to ensure that travellers have adequate travel insurance.

How does travel insurance help?

Travel insurance or trip insurance covers a variety of situations on the policyholder’s behalf, including the following:

• Medical evacuation

• Emergency expenses

• Emergency accommodation

• Personal accident

• Daily allowance

• Trip cancellation

Measures taken by IRDAI to boost travel insurance policies

In December 2021, the Insurance Regulatory and Development Authority of India (IRDAI) proposed an officialtravel insurance policy , to be launched by April 2021.

• This move focuses on common coverage and policy wordings across the travel insurance industry, in order to increase product penetration.

• The official product must have the necessary covers, as defined in IRDAI’s draft guidelines issued on December 28, 2020, and must be consistent across the market. It is mentioned that the product may be available both an individual and a group product. 

Following the IRDAI’s circular:

• Several insurers offer free rescheduling of travel insurance policies . It applies to policyholders who are postponing their trips and can now reschedule their travel insurance policies to align with their travel timelines.
  

• Some insurers are even offering premium refunds and free policy cancellation to policy holders who wish to cancel their travel plans.

• Students and tourists who were unable to travel due to travel restrictions during the pandemic can have their policies extended.

• Flight cancellation or trip delay are eligible for claim with the insurer. Several travel insurance companies provide comprehensive coverage for major medical and non-medical expenses(inclusive of baggage delay & loss, flight delay and flight cancellation).

• Modification enabling customers to pay their health insurance premiums in instalments.

The Indian travel market is one of the largest in the world, with 36% of Indian families taking vacations (both domestic and international). Domestic and international travel insurance becomes even more important as a result.

As per industry sources, the proportion of travellers purchasing travel insurance has increased by 40%, despite the fact that flight bookings are currently at 30% of pre-pandemic level.

The pandemic did result in a major dip in the average trip cost. Travellers spending has also decreased drastically and the ongoing uncertainty caused by the pandemic creates a sense of concern among them.

This does not change the fact that travel insurance is an excellent way to secure your trips, including last-minute vacations.

According to sources, travellers are booking and buying travel insurance policies much closer to their departure dates. However, do remember that waiting too long to cancel can have the opposite effect, such as being unable to buy cancel for any reason insurance.

Thus, buying travel insurance comes in real handy while travelling, especially now that cancellations are uncertain. The introduction of COVID-related coverage policies, mainly medical expense and cancellation coverage, allows travellers to feel secure and safe before making travel plans.

However, it is important to note that policies vary between different insurance providers. It is imperative to carefully read and understand a policy. Also, policies may differ between states and countries; it is mandatory that you find the correct one based on your location.

Conclusion

Following all of these regulations, as well as several changes to the regulatory framework, it appears that a positive change is on the way. Despite the fact that the pandemic has cancelled many travel plans, the expectation to embark on planned vacations in the future remains high. This translates to: instead of cancelling travel insurance policies, travellers are shifting their dates for future use. Coverage for a pandemic like COVID-19 should be of particular interest to you as a traveller, both now and in the future.

Disclaimer: The information provided in this blog is for explanatory purpose only. To obtain travel insurance, please refer to the policy wordings prospectus before purchase.

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