Does Travel Insurance Cover Flight Cancellations?

The days of airlines struggling to fill empty seats during the pandemic are over. Today, the airline industry faces labor shortages due to an increase in demand for travel. With a 300% increase in consumer complaints and passengers looking for refunds, tensions between travelers and airlines are running higher than ever. If you’re not sure how to protect your trip in these uncertain times, you may want to consider buying travel insurance which may cover expenses due to cancelled or delayed flights for a covered reason.

Before you book your next trip, here’s what to know about travel insurance for flight cancellations and how to find the best policy for you.

Don’t Airlines Always Refund for a Flight Cancellation?

Under federal law, airlines must offer a refund if a flight is cancelled for any reason and the consumer chooses not to travel. Airlines must also offer a refund if the airline makes a significant schedule change and/or significantly delays a flight and the consumer chooses not to travel. The catch? The term “significant delay” is not defined and is determined on a case-by-case basis.

If your flight is delayed, your travel refund is contingent on everything from the duration of the delay to the length of your flight. It’s really up to the discretion of the Department of Transportation (DOT) to determine when to issue a refund. It is also always possible, though not guaranteed, that your airline may offer you a refund even in circumstances where it is not required.

Why Should I Get travel Insurance if the Airline Refunds Cancelled Flights?

For cancelled flights, the airline must refund you if you choose not to travel. Even so, you will likely have significant costs beyond cancelled airline tickets to consider. Airlines are not legally required to reimburse you for other trip costs that you incur due to a cancelled flight, such as a prepaid resort, cruise, meals, or tour tickets.

You’ll likely find that the prepaid cost of your vacation far exceeds that of your flight, so it is smart to buy a travel insurance plan that covers additional non-refundable costs if your flight is cancelled. It is important to review the covered reasons for cancellation under your policy to make sure that you understand the scenarios when you will be able to file a claim. Some, but not all, trip cancellation plans will include coverage for a cancelled flight if the cancelled flight is due to an unannounced strike or the mechanical breakdown of the aircraft.

What Happens if I Miss My Connecting Flight?

Airlines usually re-book you on the next available flight, although it could take hours or more than a day to get a seat. Additional complications and delays may arise if you booked a connection on a different airline. The other airline may be able to accommodate you or could instead request that 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 due to airline delays caused by inclement weather or, in some cases, general airline delays. But be aware, if your itinerary only includes an hour or less between connecting domestic flights (two hours or less for international flights), Missed Connection coverage won’t be available.

What About travel Delay Insurance? Will It Cover Cancelled Flights?

The airline will usually re-book you on the next available flight if your flight is cancelled. Unfortunately, the next flight with an empty seat could be hours or days away. If you have travel Delay Insurance coverage, it could help defray some of the associated costs. Depending on your policy, it may cover a hotel, meals, and transportation. Your travel Delay Insurance may only cover expenses after you have experienced delays for several hours. This type of insurance has a per day expense limit and a maximum allowance, so make sure you are spending within your limit if you want to be fully reimbursed.

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

Lost luggage is an unfortunate reality for many travelers suffering through flight cancellations. You could end up spending a small fortune to replace clothes and toiletries while you try to find your bags. Most travel insurance policies offer baggage loss and baggage delay coverage for checked luggage. If your bags are delayed by six or more hours, baggage delay coverage can reimburse you for necessary personal items. However, if your checked luggage is lost or stolen, baggage loss coverage may cover the cost of replacing your lost or stolen items.

Does Cancel for Any Reason Coverage Apply to Cancelled Flights?

As the name implies, Cancel for Any Reason (CFAR) coverage allows you to cancel your travel plans for any reason. For example, you may simply have worries or fear about traveling (which aren’t covered reasons in standard trip cancellation plans) and wish to use the coverage. There are also some restrictions to consider. The coverage usually requires you to cancel your trip at least 48 hours prior to your departure date. Unfortunately, that time window won’t work for travelers who arrive at the airport, luggage in hand, to find that their flight has been cancelled. It can, however, cover you if the airline makes a significant schedule change and you decide to cancel your trip more than 48 hours before departure. Keep in mind that CFAR will typically only reimburse you for 50-75% of your pre-paid and non-refundable trip costs vs. 100% for standard trip cancellation coverage if you cancel for a covered reason.

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? Now what? 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. However, there are exceptions.

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 interruption benefit could help cover unexpected expenses, from hotels to meals. Unfortunately, travel insurance policies do not typically cover lost wages due to a flight delay or cancellation.

Why Doesn’t travel Insurance Just Cover Everything?

travel insurance policies vary to accommodate different travel plans. Simple day trips would not make use of the coverage offered by a comprehensive plan. Conversely, you will likely require broader coverage for a multi-week overseas vacation where there are many prepaid expenses and more itinerary variables.  

It is essential to compare and review policies carefully to ensure that you purchase the coverage you need. The good news is you can easily find policies that match your travel needs and budget.

Is travel Insurance Right For You?

You may not need travel insurance if your trip doesn’t include flights, rental cars, hotels or other prepaid expenses and if your health insurance will be accepted at your destination. Otherwise, the investment is well worth the peace of mind and protection you deserve. Keep in mind that you can’t decide to buy a policy after your trip starts or add to it once you leave for your trip, so it is important to plan ahead and select the right coverage for your trip.

TravelInsurance.com makes it easy for travelers to compare and buy travel insurance online from the most reputable providers. We offer high-quality plans with 24/7 emergency assistance to travelers. Our easy-to-use comparison site helps identify policies with the right trip cancellation, pre-departure and post-departure benefits at a reasonable price. Get a quote now for helpful information, the guaranteed best prices, and instant coverage.

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