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Airlines, portals can no longer mis-sell you travel insurance

IamCheated.com Research Team | October 03, 2019  6:30:pm

Many people had accidentally bought travel insurance while booking a flight ticket online; as this was a default option available on the ticket booking portal. Many people who did not know anything on the policy also ended up buying it.

But, this will soon change. The Insurance Regulatory and Development Authority of India (IRDAI) have come up with new rules which govern the sale of travel insurance policies. This new rule by IRDAI helps avoid the mis-selling of travel insurance policies to customers. In this blog, we will discuss everything you need to know on the new rule.

1. Sale of the product

As per IRDAI new rules, travel insurance must not be presented as a default option for customers. Instead, customers should be given an option to choose if they want to buy the travel insurance policy. Prior to October 1st, all travel portals presented travel insurance as a default option; and because of this, many customers unknowingly bought the travel insurance product while booking tickets. Henceforth no such pre-selection will be entertained.

2. Terms and conditions

Normally, travel insurance policies which are sold online through online holiday-booking portals will have complete details on the terms and conditions. But, as per the new rule, it is mandatory for insurers to display all features and exclusions.  

For example, many people believe that baggage is covered by travel insurance. But, many insurance companies do not cover loss or theft of baggage.  So, it is very important to read the features and exclusions while buying travel insurance policy. 

3. The validity of the product

The travel insurance is sold as an add-on product while booking the flight tickets. Henceforth, this will not happen. As per IRDAI new rules, travel insurance policy premiums can be collected only up to 90 days in advance.

4. Overseas travel

According to IRDAI rules, customers should not be under any restrictions by insurance companies on the purchase of overseas travel insurance. Customers who want to buy a global travel cover must be provided with a relevant option. They must not be forced to buy a product within a certain number of days.  The restriction which is applicable for domestic travel will not be applicable for overseas travel insurance policies. For instance, while applying for a Schengen visa, it is compulsory to have travel cover. To make sure that the visa process for international travel is unhindered, the rules have been eased.

5. Comply with the rules

According to the rules, each insurance company must make sure the travel portals follow the rules from October 1st. Every three months, insurance companies must verify if the travel portals are following the rules. If IRDAI finds any insurance product violating the rules, it will be immediately terminated.

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