It’s travel time again, and people are usually being advised to opt for travel insurance to minimize the financial risks of travelling. However, have you ever wondered what will happen to your travel cover if there is a sudden change in your holiday plans or your trip is cancelled?
In fact, an unforeseen situation can compel an individual to either cancel, curtail or postpone his/her trip. This could turn out to be a financial as well as emotional disturbance. In such scenarios, a travel insurance policy comes very handy as not only it covers you against unforeseen financial losses during travel, but it also offers benefits against trip cancellation or trip interruption in the form of postponement or curtailment.
“In case of a trip cancellation, a travel insurance policy offers cancellation benefits as per the sum insured to cover the financial losses due to sudden cancellation before the date of departure. Travel insurance offers cover against financial liabilities arising due to cancellation such as loss of personal accommodation, loss of booking fees paid for travel packages, and cost related to flight cancellation, in both complete as well as partial cancellations,” says Abhijeet Ghosh, Head-Travel Insurance, Bajaj Allianz General Insurance.
In case of the complete cancellation of a trip, the insurer can cancel the policy and refund the premium amount to the insured after deduction of nominal charges while in case of partial cancellation, such as change of travel period and travel duration, an insurer can simply cancel the existing plan and reissue the policy without any deductions while keeping rest terms and conditions as per the previous policy.
Trip curtailment, on the other hand, is a case where the individual has already started the trip and has to cut short the trip or alter its duration due to necessary and unavoidable situations. “In this case a travel insurance policy can help to compensate the financial liabilities arising due to interruptions, such as loss of accommodation, paid travel charges, and expenses related to flight cancellations. For instance, if there is change in trip dates, while the travel duration is the same, the insurer can change the policy period without any additional expenses. Even if the policy period has started and the customer has not travelled, an insurer can cancel or modify the policy travel period after confirming that the travel has not yet started,” says Ghosh.
What is covered in case of cancellation?
For a trip cancellation, say, due to an unfortunate death of any family members, or any sudden medical emergency, natural disaster at the point of destination, bad weather conditions or terrorist incident/political unrest in the city of destination, the policy can be cancelled and the premium will be refunded as per specified terms and conditions. “However, in case of curtailment of the trip post departure, the policy will compensate (if specified in the coverage) any financial liabilities that may arise due to the trip interruption up to the sum insured of your policy,” says Rajiv Kumar, MD & CEO, Universal Sompo General Insurance.
How can a policy be canceled?
As long as customer/s have not departed on a trip and have not made any claims, insurance companies allow the customers to cancel the policy with refund within 10-20 days following the purchase due to unavoidable consequences. However, the proof for not making a journey needs to be submitted.
“A request for cancellation, however, is usually considered in not less than 14 days after the first date of insurance, as mentioned in the policy schedule, subject to retention of cancellation charges applicable. For cancellation of a policy, a premium amount is retained which varies from company to company and is inclusive of service taxes,” says Kumar.
Travel covers offered by companies also differ from insurer to insurer. You should, therefore, read the policy document thoroughly, which not only tells what the policy does and doesn’t cover; it also explains the detailed cancellation procedures, charges and conditions.