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Travel insurance, especially on the domestic front, is to come with more features for customers.
"The product is one of the cheapest in the market. Hence, even if claims are low, it will not be possible to bring down the cost further. What we as an industry can do is to add more features to the basic policy," said a senior general insurance executive. Of the total non-life product portfolio, travel insurance contributes barely two to three per cent of total business.
The premiums for domestic travel insurance range between Rs 150 and Rs 2,000, depending on tenure and coverage. Currently, domestic travel policies are usually offered in association with travel portals and are priced at Rs 100-Rs 200 for domestic air travel. The shortest duration for which one can buy travel insurance is seven days. For instance, on an annual policy, which allows unlimited trips of less than 30 days each, the premium is around Rs 2,700. Sector executives said the additional features could include assistance for emergency evacuation during domestic travel, apart from covers for hand baggage. This would be available at the same price.
"This could help increase the purchase of travel insurance, very low on priority among individuals while travelling in India," said the underwriting head at a private general insurer.
A survey by ICICI Lombard said while Indians travel more frequently and on longer duration trips, there is low demand for travel insurance. The ICICI Travel Trends 2014 survey said for domestic trips, only four per cent of respondents took a travel cover, though 86 per cent were aware of it and 64 per cent thought it was essential.
Travel insurance offers medical expenses due to emergency ailments or accidents. Other expenses covered include costs on missed or delayed flights, alternative accommodation, misplaced baggage and evacuation in case of an accident due to natural calamities. In addition, these policies offer additional amounts for accidental death and associated transportation for family and accommodation for extended stay.
Given the rising popularity of adventure sports such as motor rallies, bungee jumping and rafting, insurance companies also offer policies for such holidays, albeit at a higher premium. Accidents or death resulting from these sports are not covered under a basic travel policy.
