Growing Demand for Domestic Travel Insurance: As India’s domestic tourism sector continues to surge, a new concern is emerging among both travelers and industry stakeholders — the increasing need for insurance coverage for domestic trip cancellations. In recent months, unpredictable weather events, flight delays, strikes, and regional disruptions have prompted calls for structured travel protection mechanisms similar to those available for international trips.
Rising Trend of Cancellations and Financial Losses
India’s domestic tourism market has expanded rapidly post-pandemic, with travelers exploring hill stations, beaches, and cultural hubs across the country. However, this growth has been accompanied by a significant rise in trip cancellations. Heavy monsoon rains, flash floods in hill regions like Himachal and Sikkim, and political or natural disruptions have left travelers stranded or forced to cancel plans at the last minute.
According to travel industry insiders, many travelers book air tickets and hotel stays months in advance through online platforms, but when emergencies or weather-related events strike, most end up losing substantial amounts due to non-refundable policies. This has prompted the travel community to demand domestic travel insurance that includes coverage for trip delays, cancellations, and rescheduling.
Experts Push for Mandatory Domestic Travel Insurance
Industry experts suggest that India should follow global models where domestic travel insurance is a norm. Countries like Australia, Japan, and the US provide extensive coverage options for trip cancellations, medical emergencies, and lost luggage even on internal journeys.
According to Travel Agents Federation of India (TAFI) and other stakeholders, the government should collaborate with insurers to design affordable packages tailored to the needs of domestic tourists. These would protect both individual travelers and families who book holidays through online travel agencies (OTAs).
Experts believe that such insurance would also encourage more responsible travel planning and restore confidence in tourism-dependent regions that frequently face natural calamities.
Growing Demand for Domestic Travel Insurance: Airlines and Hotels Under Scrutiny
Another key reason behind the call for domestic travel insurance is the tightening refund policies of airlines and hotels. Many travelers have reported difficulties in securing refunds despite valid cancellations. While some airlines offer partial credits, hotels — especially those in high-demand tourist spots — often enforce strict “no-refund” clauses during peak seasons like Durga Puja, Diwali, and New Year holidays.
Travelers argue that when cancellations are caused by unavoidable events such as floods, landslides, or flight disruptions, insurance coverage should step in to compensate for the losses.
Impact of Climate and Infrastructure Challenges
India’s diverse geography and weather patterns have made domestic travel increasingly unpredictable. From heavy rainfall in the Northeast and Himalayan belt to heatwaves in southern states, climatic extremes have disrupted travel plans throughout the year.
For instance, recent floods in North Bengal and landslides in the Dooars and Darjeeling hills led to the cancellation of hundreds of trips, with travelers demanding refunds that were often denied. In such cases, a travel insurance policy would have covered these unforeseen disruptions, offering financial relief.
Additionally, infrastructural challenges like flight delays due to congestion at airports and long train cancellations add to the growing frustration of passengers.
Technology and Policy Integration
Digital travel platforms such as MakeMyTrip, Yatra, and Goibibo have already started offering optional domestic insurance policies at the time of booking. However, these remain voluntary and limited in coverage. Experts believe that the integration of insurance options into booking systems should become a standard practice, ensuring that travelers are aware of their rights and coverage before confirming their plans.
The Insurance Regulatory and Development Authority of India (IRDAI) is reportedly exploring frameworks to expand micro-insurance offerings for the domestic travel sector. These products would be affordable, easy to claim, and customizable, making them accessible to middle-class and budget travelers as well.
Government and Tourism Boards’ Role
Travel industry leaders have urged the Ministry of Tourism and state tourism boards to take proactive measures. They suggest that insurance partnerships could be introduced under regional tourism campaigns — for instance, “Safe Hills Travel” in the North East or “Protected Coastal Journeys” for Goa and Kerala.
Such initiatives would not only safeguard travelers but also strengthen India’s image as a secure and reliable travel destination.
Furthermore, experts argue that with India’s domestic tourism economy expected to reach USD 100 billion in the next few years, travel insurance could play a major role in stabilizing revenue flows for both consumers and service providers.
Need for Awareness Among Travelers
While policies exist, awareness among domestic tourists remains low. Many are unaware that affordable travel insurance options can cover emergencies such as flight delays, medical evacuation, or loss of personal belongings. Awareness campaigns through travel agencies, airlines, and government portals could help bridge this gap.
Incorporating insurance into tour packages — especially for senior citizens and family groups — could also become a best practice across the sector.
Balancing Costs and Consumer Protection
Critics of mandatory travel insurance argue that additional costs may deter budget travelers. However, industry experts counter that such policies can be priced as low as ₹100–₹300 for short domestic trips, depending on the coverage and duration. The small cost, they argue, is a worthwhile investment to safeguard against potential financial setbacks.
Future Outlook: Towards Safer Domestic Travel
As India witnesses unpredictable weather patterns, growing infrastructure demands, and a surge in local tourism, domestic travel insurance is becoming not just a luxury but a necessity. With increasing public pressure and industry advocacy, it is likely that more comprehensive insurance schemes will soon be rolled out.
The government’s collaboration with private insurers could pave the way for a more resilient tourism ecosystem — one that ensures every traveler’s journey across India is both secure and financially protected.
For detailed updates and travel safety regulations, readers can refer to the official websites of:
- Ministry of Tourism, Government of India
- IRDAI (Insurance Regulatory and Development Authority of India)
- Incredible India
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