Visa rejection: Will your travel insurance policy cover trip cancellation expenses?

“In basic, regular international travel insurance policies, trip cancellation due to visa rejection is usually not covered. Some companies do cover this expense under their high-end plans. We are also planning to launch a visa rejection rider in near future,” says Chandrakant Said, Vice President- Consumer Underwriting, TATA AIG General Insurance.

Put simply, travel insurance reimburses trip cancellation costs only for specific reasons listed in the policy document. “These include illness or hospitalisation, natural disasters, passport theft, strikes or riots or travel bans issued by the Indian government. Immigration-related complications don’t usually fall within these predefined events,” adds Vivek Chaturvedi, CMO and Head of Direct Sales, Digit Insurance. Similar is the case with trip abandonment coverage.

The push for specialised visa rejection riders comes at a time when volatile geopolitics has led to stricter Visa issuance policies, which are also becoming unpredictable and the changes are often sudden. “To be sure, we started working on this (visa rejection cover) feature much before the geopolitical scenario across the world turned tumultuous. When we surveyed our customers, one of the key requirements was coverage for trip cancellations due to visa rejections. The key learning was that customers want a plan that reimburses cancellation expenses pertaining to non-refundable flight ticket and pre-booked accommodation cost,” adds Said of Tata-AIG General.

The Visa rejection add-on, at present, is gaining more traction amongst those planning trips to Europe. “This is more popular among Europe-bound travellers compared to the US, as travel insurance is a pre-requisite for applying for a Schengen Visa,” says Meet Kapadia, Head, Travel Insurance, Policybazaar.com. According to the online aggregator, the premium for a visa rejection add-on can range from Rs 2,654–Rs 4,091 for a sum insured of $250,000. “It will cover the visa application fee (typically up to Rs 15,000) forfeited as well as trip cancellation expenses,” he adds.

Know what is not covered

However, as with any insurance policy, this cover, too, comes with its set of restrictions and exclusions. “The condition here is that the visa should not have been rejected due to errors or omissions at the applicant’s end. For example, if you have missed furnishing your ITR or bank account statements in line with your destination country’s requirements, your claim will not be approved,” cautions Kapadia.

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For those who seek broader protection against visa rejection or any other cause that might derail their trips, general insurance companies and their travel partners/distributors offer ‘Cancel For Any Reason (CFAR)’ riders. “However, to be eligible for a CFAR claim, the trip must be cancelled at least 24 hours prior to scheduled departure,” he says.

Besides, trip or flight cancellation, expenses may not be payable under the 'Trip abandonment' cover either. "It only kicks in if the traveler is forced to cancel or shorten their trip due to the covered reasons mentioned in the policy. Since visa delays or the inability to re-enter a country due to immigration restrictions are not usually part of the standard coverage, any related claims are unlikely to be admissible. It’s important to read the policy terms of your travel insurance policy to carefully understand what is and isn’t covered," says Chaturvedi.

On the other hand, if you have opted for the Cancel For Any Reason (CFAR) benefit, whether in-built or as an add-on, your travel policy is likely to reimburse the claim. "This usually comes at an additional premium, but is 'no-questions-asked' reimbursement. Such policies will reimburse claims arising out of flight or trip cancellation due to such events (change in Visa policies of foreign governments)," says Kapadia.