Insurance players expect travel insurance to find more takers after IndiGo fiasco

IndiGo crisis has reminded travellers of the practical value of comprehensive coverage.

IndiGo’s widespread flight cancellations last week have firmly put travel insurance in focus, with insurers already seeing an uptick in demand.

Thousands of passengers were left stranded across airports in the country as India’s biggest airline failed to align its roster with new rules aimed at reducing pilot fatigue, leaving behind a trail of cancelled vacations, missed weddings and even doctor appointments.

“Following the recent delay and cancellation of flights by an airline, we have observed a rise in demand for travel insurance,” said Vivek Chaturvedi, CMO and head of direct sales at Go Digit General Insurance.

Insuring against delays

Uncertainty often acts as a trigger for travellers who otherwise tend to overlook travel insurance, he said. Incidents like these, delays due to natural disasters or holiday seasons, “often nudges travellers to proactively seek financial protection against unforeseen disruptions”, he added.

The crisis reminded travellers of the practical value of comprehensive coverage.

“The benefits include operator-initiated cancellation, which covers flight cancellations made by the airline or operator, ensuring that you are neither stranded nor financially burdened by the disruption. If your flight is delayed beyond the time specified in your policy, you are eligible for compensation, which helps you manage necessary expenses comfortably while waiting,” he said.

Other benefits, like flight diversion benefits, can help offset the inconvenience and additional costs incurred when a flight is rerouted, similar to the experience of many passengers during the recent disruption seen by an airline.

“We anticipate that such events will drive increased awareness of travel insurance and encourage more customers to opt for coverage in the future,” Chaturvedi said.

He emphasised affordability as a key factor that travellers often underestimate.

“With premiums typically starting from Rs 49, you gain access to a comprehensive set of valuable coverages,” he said.

Travellers who benefited from insurance cover are likely to make it a habit in the future.

Meet Kapadia, Head–Travel Insurance at PolicyBazaar, agreed that the recent events has piqued customer interest in travel insurance.

The episode is likely to shift behaviour. “This disruption should act as an eye-opener for frequent travellers on the importance of carrying flight delay and cancellation cover as part of their travel plan,” he said.

Under-penetration

Travel insurance adoption remains low in India.

“Out of every 100 travellers, domestic or international, only about 7–8 people opt for travel insurance,” Kapadia said.

The longer-term trajectory may mirror the post-COVID rise in medical coverage among outbound travellers to high-cost destinations such as the US, Europe, Australia and New Zealand.

Despite clear benefits, travellers remain hesitant, often due to misconceptions about cost.

“The irony is that the cost is relatively negligible compared to overall trip expenses. On a domestic ticket of Rs 5,000, people hesitate to spend Rs 300– Rs 400. But on an international trip costing Rs 70,000– Rs 80,000 or more, a few thousand rupees on insurance is financially insignificant, yet uptake remains limited due to low awareness,” Kapadia said.

Many still view travel insurance narrowly, as baggage or trip-interruption protection, while overlooking the far bigger risk of medical emergencies abroad, he said.

Insurers are beginning to see more customers reaching out with potential claims, especially involving missed connections and non-refundable hotel bookings.

“We are now seeing rising interest in hotel cancellation and missed-connection claims, especially where travellers had booked onward international legs,” Kapadia said.

“We typically see a 5-7 percent rise in trip-related claims during such events,” he said, noting that while health claims dominate international travel insurance, trip-interruption claims spike during large-scale operational failures.