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Monday 16 November 2015

Paris attacks fallout: Insurers foresee pick up in travel insurance

Insurers and industry-watchers expect a spike in demand for travel insurance in light of terror attacks in Paris last Friday, as international travellers wake up to the possibility of such threats across the globe, including high-sought-after destinations in developed nations.

"The unfortunate incident could prompt travellers to recognise the importance of travel insurance, even when they are travelling to countries where it is not mandatory," said Nikhil Apte, chief product officer, product factory (health insurance), Royal Sundaram Alliance Insurance. Travel insurance is compulsory for obtaining a Schengen visa, which covers 26 European nations, including France. "After the recent terror attacks, travel insurance has become all the more important as it provides you financial cover and peace of mind if you get caught in such volatile situations," said Naval Goel, CEO and founder, PolicyX.com, an insurance aggregation portal. Insurance companies make a distinction between war, riots and terrorism. The latter is defined as an act of violence that causes loss of life and property where perpetrators belong to groups that seek to weaken control of established governments.

Similarly, other lines of insurance business - life, health, personal accident and home - too are likely to attract more interest. "Insurance seekers are already evaluating policies on the basis of their comprehensiveness. For instance, several high-end health covers pay for evacuation from primary care centres to hospitals of insured's choice in case of emergencies," said Apte.

Incidents like the one in Paris could prompt rise in insurance purchases and deeper analysis by insurance-seekers. You need read the fine print carefully to understand the scope of coverage and the items that the company will not pay for.

Travel insurance

Many travel insurance policies do cover listed expenses arising out of terror attacks. "All risks like trip cancellation, loss of passport, medical expenses, repatriation of remains etc are covered as part of the regular travel policy even if they result from terrorism," said Sanjay Datta, head, underwriting and claims, ICICI Lombard. Your accommodation expenses will also be reimbursed if you have to extend your stay due to an emergency. Depending on the variant chosen, the company will also pay for your journey back home and visit from a relative on compassionate grounds.

However, you need to go through the policy documents in detail before signing up for one as some companies may not pay for risks emanating from terrorism. For example, Tata-AIG specifically mentions terrorism as exclusion in its travel policy, though it covers flight hijacking. Besides, even in policies that provide insurance against terror, insurers will not admit claims if policyholders visit destinations that are known to be facing such risks or knowingly violate safety regulations. For instance, if a policyholder were to suffer injuries after venturing out despite instructions from Paris authorities to stay indoors, her claim could come under a cloud. "You also need to figure out whether the coverage applies only to a city that is specifically on your itinerary, or also extends to the other cities or to the country as a whole," added Kumar.


Source: Economic Times

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