The massive disruption at IndiGo Airlines — which has cancelled over 4,500 flights in one week due to a pilot shortage — has highlighted one of India’s most neglected financial protections: travel insurance. The crisis, which left thousands stranded across airports, has intensified conversations on why most Indian travellers continue to fly without coverage despite rising delays, cancellations and turbulence-related incidents.

A booming aviation market with minimal insurance coverage

India now operates one of the world’s busiest aviation networks, but travel insurance remains a tiny segment — less than 1% of the ₹3-lakh-crore general insurance industry.
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IRDAI data for FY24 shows:

  • 23 lakh overseas travel policies sold,
  • covering 7.5 million travellers,
  • generating premiums worth ₹1,099 crore.

Domestic travel insurance is even smaller:

  • premiums of just ₹125.5 crore,
  • spread across 43 crore lives,
  • largely consisting of low-value, embedded coverage bundled with train tickets or online travel bookings.

Why Indians rarely buy travel insurance

Experts attribute the dismal uptake to behavioural bias, misconceptions and poor awareness.

“In developed markets, travel insurance is seamlessly embedded while booking. In India, it remains optional and easily ignored,” said Narendra Bharindwal, President, Insurance Brokers Association of India.

Common misconceptions persist:

  • many believe insurance is only for rare accidents,
  • others assume DGCA or airlines will compensate for all disruptions,
  • some avoid the extra effort or fear claims will be rejected.

Sudhish Ramteke of Anand Rathi Insurance Brokers said domestic uptake remains stagnant because travellers expect the airline or regulator to resolve issues.

IndiGo meltdown shows why insurance matters

With IndiGo grounding flights nationwide, many stranded passengers discovered how few protections they actually had.

“Mass cancellations show how unpredictable air travel can be. Travel insurance provides fixed payouts for long delays, cover for missed connections, emergency accommodation and 24×7 assistance,” said Meet Kapadia, Head of Travel Insurance at Policybazaar.com.

Policies typically offer:

  • fixed payouts for delays beyond 6–12 hours,
  • reimbursement for rebooking flights,
  • hotel and meal coverage,
  • emergency travel support.

What travel insurance usually covers

  • Trip cancellation or curtailment: refund for non-refundable bookings.
  • Flight Delay Allowance: lump-sum payouts regardless of bills; domestic payouts usually ₹1,000–₹5,000.
  • Missed connections and baggage delays.
  • Accommodation and essentials during extended disruptions.
  • 24×7 emergency support.

Credit card users may also have built-in travel insurance — present in nearly 8% of India’s 650+ card variants — but benefits apply only if the ticket is booked using that card.

What insurance may not cover

Not all disruptions qualify for payouts. Claims are often rejected due to misunderstanding policy rules.

According to Saurabh Vijayvergia, CEO, CoverSure:
“When disruptions stem from the airline’s internal issues, the cancellation itself may not always be covered. Secondary impacts, however, usually are.”

Exclusions typically include:

  • short delays under the minimum threshold,
  • operational cancellations unless explicitly covered,
  • weather or “Acts of God” (policy-dependent),
  • voluntary rebooking by the traveller,
  • civil unrest, strikes or government travel bans,
  • pre-existing medical conditions.

Trip cancellation cover applies only when the reason matches specific triggers such as:

  • medical emergencies,
  • death in the family,
  • natural disasters.

What airlines must provide even without insurance

DGCA rules require airlines to offer:

  • full refund or alternate flight for cancellations,
  • meals and refreshments for stranded passengers,
  • hotel accommodation and transfers for long delays.

Insurance benefits apply only after these statutory obligations are met.

Claims depend heavily on proper documentation

For a successful claim, insurers require:

  • a delay or cancellation certificate from the airline,
  • boarding passes and ticket details,
  • receipts for meals, hotels and rebooking expenses.

Without these records, claims often fail even when the disruption is genuine.

A wake-up call for Indian travellers

The IndiGo crisis has renewed calls for India to improve digital embedding of insurance during ticket purchase and expand awareness about coverage benefits.

Experts say that with flight disruptions becoming more common, travel insurance is no longer optional — it is essential protection for travellers navigating an increasingly unpredictable aviation environment.