Travel policies do not cover adventure activities

It’s better to go through the fine print instead of buying a policy with the lowest premium

The District Consumer Disputes Redressal Forum recently dismissed Mumbai-based Nagin Parekh’s complaint against his insurer, which had denied his claim for the treatment of injuries suffered during a hot- air balloon crash, calling it a “hazardous activity”. Most people who travel abroad, and many who travel within the country, nowadays buy travel insurance. But most buyers look only at the premium and do not go into the finer points of the policy document. Parekh was, by all accounts, not aware that an injury sustained during hot-air ballooning would not be covered. Before you head out on an adventure holiday, do try to understand the terms and conditions of your travel policy.

Travel insurance policies do not generally cover adventurous or sporting activities such as bungee jumping, paragliding, mountain climbing, or white water rafting, which fall under hazardous activities. However, these policies do take care of sudden illnesses. Says Parag Ved, executive vicepresident and head-consumer lines, Tata AIG General Insurance: “Travel insurance policies focus on the medical expenses incurred in the case of sudden illness or injuries during a trip.”

If you meet with an accident during a trip within the country, your health insurance policy will take care of your hospitalisation costs. Adds Tarun Mathur, chief business officer, general insurance, Policybazaar.com: “Travel insurance is primarily an overseas health insurance product with similar benefits. The difference is that travel insurance claim is payable in case the accident and hospitalisation occur outside India.”

In addition, most insurers deny a claim for pre-existing diseases. Some, however, provide cover in the case of a life-threatening situation. For instance, TATA AIG’s travel insurance covers preexisting diseases in lifethreatening situations up to $1,500.

Travel insurance policies also provide cover for non-medical matters, such as trip cancellation, flight delay, checked baggage loss, loss of passport, and hijacking, but each of these has its own limitations.

People are often confused between the policy start date and the first day of their holiday. For instance, if a trip is called off in advance, the travel insurance provider can turn down a claim for trip cancellation, stating that the policy cover hasn't started yet. In the case of theft or loss of your belongings or passport, you need to obtain a police report and notify your insurer as soon as you realise it. If you do not do so within a specific time frame, you could lose out on your insurance claim. Even if you act promptly in the case of theft or loss of belongings, your travel insurance provider could reject your claim if it feels it happened owing to negligence on your part.

Some insurers also have a “your excess” component hidden in the fine print of their policy. This is what you pay in the case of a claim you make during an insured vacation. For instance, if you file a claim for ~10,000 and your excess is ~4,000, your travel insurance provider will pay ~6,000 and you shell out the remaining ~4,000.

Inclusions and exclusions in travel insurance policies vary from one company to another. Some specific exclusions can be waived. Says Sanjay Datta, chiefunderwriting, claims, reinsurance and actuary, ICICI Lombard: “If needed, a person may look at the option of covering some of the exclusions by paying an additional premium, subject to the underwriter’s assessment and approval.” There are, however, specific exclusions the insurer will not waive even upon paying an additional premium, such as coverage for the loss of the entire baggage (insurers have limits for this).