Does Insurance Cover Flight Cancellations?

Does Insurance Cover Flight Cancellations?

With airlines cancelling or delaying thousands of flights due to weather, crew and aircraft shortages, travelers are increasingly asking if travel insurance will cover flight cancellations.

As their customer, airlines have options to reimburse you for the inconvenience of a cancelled flight: offering you a refund, giving you a voucher for future travel, rebooking you on a different flight or even trying to get you on a flight with another airline.

According to the US Department of Transportation, “Compensation is required by U.S. law only when certain passengers are “bumped” from a flight that is oversold.” However, if your flight is cancelled and you cancel your trip as a result, the DOT states: “you are entitled to a refund for the unused transportation – even for non-refundable tickets.  You are also entitled to a refund for any bag fee that you paid, and any extras you may have purchased, such as a seat assignment.”  

However, they are not required to refund you for additional prepaid trip costs such as hotel bookings, excursions, cruises, tours etc. Airlines must also offer a refund if the airline makes a significant schedule change and/or significantly delays a flight and you choose not to travel. But what they consider a significant change and what you consider it can be vastly different!

What will my travel insurance cover if the airline refunds my cancelled flight?

Travel insurance plan may be able to cover additional non-refundable costs if your flight is cancelled due to severe weather, a worker strike or mechanical issue with the aircraft. If the flight cancellation is due to staff shortages, travel insurance most likely won’t be able to help. If you have a Cancel For Any Reason (CFAR) policy and are notified of the flight cancellation at least 48 hours prior to departure, you could file a trip cancellation claim and get a partial refund (50% or 75% depending on the policy purchased). However, if you’re at the airport when informed of the flight cancellation, a cancel for any reason policy won’t help.

If my flight is cancelled, can my airline put me on another airline’s flight?

If your flight is cancelled, most airlines will rebook you for free on their next flight to your destination if the flight has available seats. While airlines are not required to put you on another airline’s flight, they can and sometimes do, so it does not hurt to politely ask your airline if it will transfer your ticket to another airline that has a flight with available seats. 

If my flight is cancelled, is the airline required to provide me with a hotel room, a food voucher, or reimbursement for any other non-airline ticket costs associated with my trip?

No.  Airlines are not required to provide passengers with money or other compensation for costs that fall outside of the cancelled airline ticket and fees tied directly to the airline ticket (such as baggage fees, seat upgrades, etc.) when flights are cancelled.  

If your flight is cancelled, ask the airline staff if they will pay for meals or a hotel room while trying to get rebooked on another flight. If the airline is unable or unwilling to provide meals and a hotel room, and your travel insurance has trip delay benefits you may be able to get reimbursed for meals and hotel costs usually after a 6+ hour delay.

What Happens if I Miss My Connecting Flight?

When a flight is cancelled, airlines usually try to book you on the next available flight, which might be the next day or longer. If you had connections on another airline, the other airline may try to rebook you, or worse case make you pay for a new ticket. Many travel insurance plans offer Missed Connection coverage which can provide up to $1,000 for additional transportation expenses if you miss your connecting flight. There is usually a time delay (such as 3 hours or 6 hours) that you must exceed before missed connection benefits will apply. If your delay is shorter, Missed Connection benefits won’t be available.

What Will Travel Delay Insurance Cover?

If your new flight is not for several hours or until the next day, Travel Delay benefits, can help cover a hotel stay, meals, and transportation. Most policies have a per diem amount with a maximum allowable amount per trip. Be sure to review your policy for these limits and how long of a delay you must experience before this benefit is available.

What If the Airline Also Loses My Luggage After Canceling the Flight?

Most travel insurance policies offer baggage loss and baggage delay coverage for checked luggage. If your bags are delayed typically by six or more hours, baggage delay coverage can reimburse you for necessities up to the amount specified in your policy. However, if your checked luggage is lost or stolen, baggage loss coverage may cover the cost of replacing your lost or stolen items less any amount reimbursed by the airline.

Does Cancel for Any Reason Coverage Apply to Cancelled Flights?

Cancel for Any Reason (CFAR) policies allow you to cancel your travel plans for any reason whatsoever, not just the standard listed reasons in the policy. You may have concerns which aren’t listed as covered reasons to cancel in standard policies, such as border closures, fear of travel to that destination due to a spike in COVID or civil unrest in the area. A CFAR policy would allow you to cancel for these reasons. However, a CFAR policy will only reimburse you for 50-75% of your pre-paid, non-refundable trip costs if using a non-standard reason to cancel. Cancelling using a standard, listed reason can refund up to 100% of trip costs and you can cancel up to the last minute.

However, CFAR policies require you to cancel your trip at least 48 hours prior to your departure date if you are not using a covered reason listed in the policy. Unfortunately, that won’t help you if you’re notified at the gate that your flight has been cancelled. If the airline notifies you 48 hours or more that they’re making a schedule change or cancelling your flight, you would have enough advance notice to cancel the trip with a CFAR policy.

Will My Travel Insurance Cover a Switch to Another Airline?

What if your flight is cancelled and your best option to get back on your travel schedule is with another airline? Some travel insurance policies will cover the expense of switching airlines if it takes at least 24 consecutive hours past your original arrival time to get to your destination. In this case, you may qualify for reimbursement for the cost of alternate transportation, like another airline. Check with your policies for requirements.

What If It Takes Me Extra Time to Get Home? Will I Have Additional Insurance Coverage?

It is not uncommon to experience unexpected delays getting home when a flight is cancelled. Most travel insurance will extend coverage up to a week, but you will need to confirm that your particular policy includes this benefit. The trip delay benefits could help cover unexpected expenses, from hotels to meals. Be sure to let your insurer know that you will be delayed in getting home so your policy is not prematurely cancelled.

Do I Really Need Travel Insurance?

Maybe not. If your trip doesn’t include prepaid, non-refundable trip costs and if your health insurance will provide coverage during your trip then you may not need travel insurance. Otherwise, obtaining travel insurance is a wise decision and can save you from financial ruin should a severe illness or injury occur. Be sure to purchase insurance prior to 24 hours of departure as you can’t purchase within the 24-hour window or during your trip.

Have questions? Chat with us online, send us an email at agent@traveldefenders.com or alternatively call us at +1(786) 321 3723. We would love to hear from you.

Safe Travels!