The insurance industry regulator has come out with new guidelines on travel insurance that makes it optional for travellers to buy policy coverage while booking a tour package online.

“Insurers shall ensure that any portal or app providing the travel insurance coverage shall not pre-select the option of buying travel cover as the default option. The prospect shall be able to specifically choose whether or not to buy the coverage,” IRDA said in a circular on travel insurance products and operational matters.

The insurance company providing the cover would have to display the benefits, terms and conditions on the booking screen and make a provision for the policyholder to affirm whether he has understood the same.

“Where selected to buy, an option shall be provided for opting out or de-selecting the option before concluding the transaction,” the circular said.

Name of the insurance company which is offering the cover and the amount of premium have to be disclosed as cost of travel cover. Rate of tax applicable to the premium also has to be specifically disclosed.

Travel insurance is typically packaged as part of the total travel cost and individuals booking often have no choice to opt out or to understand the details of what is actually covered. According to industry officials the move will curb mis-selling of travel insurance.

The regulator has said that the insurers would have to put in place procedures to verify that at least once in a period of three months, policies offered are complying with norms.