Although you should be aware of the limitations and exclusions, specially designed riders may shield you from losses on canceled trips.
Concerns over visa applications are once again in the spotlight due to the current tightening of US H1B visa regulations, which has continued to make headlines.
Furthermore, Indian professionals who seek for work visas are not the only ones who worry about denied visas. Many Indian leisure travelers have also encountered visa refusal in recent years, especially while arranging visits to European Schengen nations where travel insurance is required. Last-minute rejection might ruin their vacation plans abroad and cost them a fortune.
Coverage is restricted by normal policies
Such trip cancellation costs and visa application fees, which must be forfeited in such circumstances, are usually not covered by a regular travel insurance policy. In order to compensate for losses resulting from canceled flights and hotel reservations that are exclusively the result of visa denials, many insurers are now developing riders, which are optional coverages that you may purchase for extra charges.
“Trip cancelation resulting from a denied visa is often not covered by basic, standard international travel insurance coverage. Some businesses do include this cost in their premium plans. Additionally, we want to introduce a visa refusal rider soon,” adds Chandrakant Said, TATA AIG General Insurance‘s vice president of consumer underwriting.
Travel insurance often only pays out for trip cancellations for the circumstances specified in the policy agreement. These include of sickness or hospitalization, riots or strikes, natural calamities, passport theft, or travel restrictions imposed by the Indian government. According to Vivek Chaturvedi, CMO and Head of Direct Sales at Digit Insurance, immigration-related issues often do not fit into these predetermined categories. The same is true for trip abandonment insurance.
At a time when unstable geopolitics have resulted in tougher visa issuance procedures that are also growing unpredictable and often alter abruptly, there is a drive for specialized visa denial riders. Indeed, we began developing this functionality long before the global geopolitical landscape became unstable. One of the most important needs we identified in our client survey was insurance against trip cancellations brought on being denied visas. Customers prefer a plan that reimburses cancellation expenditures related to non-refundable airline tickets and pre-booked lodging costs, he says. This was the main lesson learned.
Right now, more people who are thinking about traveling to Europe are using the visa refusal add-on. Since applying for a Schengen Visa requires having travel insurance, this is more common among travelers heading to Europe than the US, according to Meet Kapadia, Head, Travel Insurance, Policybazaar.com. The online aggregator states that for a total insured of $250,000, the price for a visa refusal add-on might vary between Rs 2,654 and Rs 4,091. He continues, “It will reimburse the forfeited visa application cost (usually up to Rs 15,000) as well as trip cancellation charges.”
Recognize what is not covered
However, this coverage has its own set of limitations and exclusions, just like any other insurance policy. The requirement here is that the applicant’s mistakes or omissions should not have resulted in the visa being denied. For instance, your claim will not be accepted if you have not provided your ITR or bank account statements in accordance with the regulations of your destination country,” warns Kapadia.
General insurance firms and their travel partners/distributors provide “Cancel For Any Reason (CFAR)” riders for those who want more comprehensive protection against visa refusal or any other factor that might cause their vacation plans to fall apart. “However, the trip must be canceled at least 24 hours before the planned departure in order to qualify for a CFAR claim,” he states.
Additionally, the “Trip abandonment” policy may not cover expenditures related to trip or flight cancelation. It only comes into effect if the policy’s covered reasons require the traveler to postpone or cancel their trip. Any associated claims are unlikely to be acceptable since the basic coverage often does not cover visa delays or the inability to re-enter a country because of immigration restrictions. According to Chaturvedi, it is essential to thoroughly review the policy conditions of your travel insurance coverage in order to determine what is and is not eligible.
However, your travel insurance is likely to pay the claim back if you have chosen to use the Cancel For Any Reason (CFAR) benefit, whether it is an add-on or an inherent feature. “This is ‘no-questions-asked‘ reimbursement, although it often carries an extra charge. According to Kapadia, such plans will pay claims resulting from flight or trip cancellations brought on by such circumstances (changes in foreign countries’ visa regulations).