Travellers will not feel the pinch of rising travel insurance premiums this year, thanks to the stability of the rupee, which has ensured that insurers maintain the current rates.

The claims for outbound travel insurance are paid out by general insurance companies in foreign currency, while they usually collect the premium in rupees.

A senior official of a public sector general insurance company said that since the rupee has stabilised at 60-61 to the dollar over the last six months, general insurers would be able to maintain the current premium rates.

Last year, faced with volatile rupee movements, general insurers had asked the Insurance Regulatory and Development Authority to link travel insurance to the exchange rate fluctuation in the currency.

According to a recent study by ICICI Lombard, despite an increase in the number of Indians travelling for leisure and business in the international and domestic circuits, purchase of travel insurance, especially for trips to Asian countries and in the domestic sector, remains very low.

The survey results showed that while taking leisure trips, Indians purchase insurance more for overseas travel (38 per cent) than domestic travel (4 per cent).

Medical claims account for a major proportion of travel-related claims. However, those travelling un-insured could be doing so at their own peril: for instance, hospitalisation for a day in the US could cost up to $10,000.

According to Sanjay Datta, Chief, Underwriting and Claims, ICICI Lombard, “It is important that Indian travellers realise the criticality of taking travel insurance for covering unforeseen risks pertaining to medical emergencies, and tour-related mishaps such as baggage loss.”

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