Several social media users recently shared 'proofs' of having cancelled their scheduled trips to the Maldives, citing racism against Indians by Maldivian ministers and the ongoing #BoycottMaldives campaign by certain individuals and organisations. Some travel agencies, too, have shared screenshots of cancelled flights and hotel reservations, even as airlines and online booking platforms deny any flight cancellations.
However, the online insurance platform InsuranceDekho confirmed halting the issuance of travel insurance to the Maldives on the platform.
Even as the episode unfolds, those booking foreign trips need to understand the impact of insurance on the overall foreign tour expenses.
Before falling for the ‘Trip Cancellations Covered’ advertisement campaigns of travel insurance issuers, one must understand that there are conditions and fine print involved, and yes, a trip cancelled due to the #BoycottMaldives campaign by certain individuals and organisations on social media platforms wouldn’t be entertained as a valid reason for the trip cancellation claim.
Also read: Prime Minister Modi's Lakshadweep visit exposes tension in India-Maldives ties
Will you be able to claim trip cancellation?
If you happen to cancel your trip to the Maldives without a reason covered under the specific reasons mentioned in the policy document, then the insurance claim will not be admissible under the standard policy terms.
“Self-induced cancellations are not usually covered under trip cancellation,” says Ambrish Dubey, Vice President – Travel at Tata AIG General Insurance.
“Coverage varies substantially based on the insurance cover one has opted for — the entity that is leading to cancellation, the time involved, and other policy conditions,” says Abhishek Bondia, co-founder of SecureNow Insurance Broker.
Why can’t insurers permit such claims?
“Insurance as a product is meant to protect you from unwanted and unforeseen events that may play out either within the country or in the destination country. Merely saying that 'I don’t feel like going on the trip' doesn’t warrant any insurance claim,” says Dubey.
Most other relevant reasons are covered as triggers for a claim, say insurers.
What happens if airlines cancel flights to Maldives?
If the trip is cancelled due to the common carrier (airline) declining to fly due to government regulations, then the insurance company can verify the details and offer compensation for the trip cancellation based on the sum assured and the policy wording.
“Usually, the carrier handles the situation itself and doesn’t leave the passengers stranded. Only when the airline doesn’t compensate or offer alternatives can the insurance claim be filed,” says Dubey.
When can you make a claim under this clause?
However, if the trip is cancelled by individuals due to illness, hospitalisation, death, injury of self, co-travellers, or family, then the reasons can be mentioned in the claim form. Additionally, catastrophic events such as natural disasters or epidemics would be valid reasons. However, when individuals cancel holiday bookings and plans for the Maldives on their own, they are not covered by insurance.
Cancel for any reason
An upcoming product in the travel insurance market is ‘Cancellation For Any Reason’ or CFAR, where one can request an insurance claim for trip cancellation for any reason.
Currently, it is largely restricted to domestic travel and is not meant for overseas travel. But a few general insurance companies offer international travel policies with additional coverage called ‘Trip cancellation for any reason’.
“If an individual has opted for CFAR coverage and cancels their Maldives trip independently, then the claim will be admissible, subject to the terms and conditions. But this coverage requires an extra premium for broader coverage,” says Aashish Sethi, Head - Health SBU and Travel, Bajaj Allianz General Insurance.
Claim documents needed
“If the airline has cancelled flights to the destination and you want to pursue an insurance claim, then you would need an airline certification specifying the time of delay beyond the threshold (24 hours delay, etc) or cancellation reason,” says Bondia.
He adds that a discharge summary, hospitalisation proof, and diagnoses would have to be submitted if you are submitting claims based on a medical emergency for yourself or family members.
Can you claim refund for insurance policy before flying?
Yes, if you are not flying to the destination country and wish to cancel the travel insurance policy, you can do so before the travel date.
“Barring a nominal amount and GST, the premium is refunded. There are no restrictions in terms of the number of days before the travel date for the policy cancellation before the take-off,” says Dubey.
However, insurance brokers have had adverse experiences in the past and indicate that claiming a refund wouldn’t be as easy.
“While policy cancellation rules for such short-term policies are strict and one shouldn’t expect much of a refund, there are some special offers, namely, ‘Change of Plan’ for rescheduling at no extra cost, that tour operators and aggregators offer through their own group insurance covers, which can be explored,” says Bondia.
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