Insure, don’t ignore

The next time you have itchy feet and go abroad to slake the wanderlust, take some travel insurance. There’s no saying when your passport or baggage might go missing, or when that exotic street food you tried decides it does not agree with you. The costs associated with setting things right, like hospitalisation, for instance, can be higher than you expect. Moreover, travel insurance is mandatory for visas to some countries.

Losses occurring from personal liability, cancelled and missed flights and theft are also covered. If you are already the kind who takes travel insurance, don’t just leave it to your travel agent, read this primer to find out more.

There are several kinds of schemes based on the traveller and trip type (student, corporate, senior citizen, single-trip and so on). The Department of Consumer Affairs and Consumer Voice magazine conducted a study involving insurance company representatives dealing with travel insurance, travel agents, customers who had bought a policy at least once, and potential customers of travel insurance. It compared the policies being offered by 13 companies.

The standard policy chosen for the study is an individual single-entry policy with a cover of $100,000 for a 10-day trip, excluding the US/Canada, where prices are higher. The coverage in the policies is in US dollars.

Illness cover was given the most weightage. Medical expenses due to accident or sickness, major or minor – whether one is hospitalised or not – are all covered under this clause. It also includes cashless hospitalisation and emergency evacuation. Accident and emergency dental expense reimbursement gives the policyholder worldwide coverage against accidental death and dismemberment while they are abroad.

Premium/price and baggage loss/delay were next. In case the policy has a lot of fringe benefits such as fire cover and burglary cover for home content, the premium amount will go up.

Travel insurance includes compensation for the loss of checked-in baggage or for “reasonable” expenses made for purchase of necessities due to delay in arrival of checked-in baggage while overseas. This benefit generally has a certain limit.

Personal liability benefit refers to compensation for damages to be paid to a third party resulting from death, bodily injury or damage to property you may cause involuntarily. You may think the chances of something like that happening are minimal. But if it does, it spells legal trouble and the claims, which have to be settled, can run into thousands of dollars.

Travel insurance policies also carry special-risk benefit options such as hijack distress allowance and emergency cash advance.

Travel insurance policies include certain deductibles applied to the coverage, which means that some costs will not be paid by the insurance company. This means that you will have to pay that amount and the rest will be borne by the insurer.

Consumer Voice recommends Bajaj Allianz as the best buy for its “comprehensive coverage, better benefits for a lower premium”. It terms ICICI Lombard, Royal Sundaram and Tata AIG General Insurance as ‘good buys’.

Don’t forget to investigate the claim process. Customers should check with their insurance company the details of the third party administrator who provides the claim assistance and is the point of contact. Their contact details are mentioned on the policy document. Make sure you preserve the bills and other documents for future reference and reimbursements.

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