Travel Insurance For Flight Cancellations

Airline staff members are not readily available, which has resulted in a spike in the number of flight cancellations.

The percentage increase in flight cancellations in the United States (3.9%) this year is more than double the percentage increase in 2013 (1.8%), according to the United States Department of Transportation (DOT).

A flight delay or cancellation can be the first domino to fall when things begin to go wrong on a vacation, according to Daniel Durazo, a spokesman for Allianz Global Assistance. Play your cards right, and be ready for the unexpected with a travel insurance policy that will give you benefits for travel delay, trip disruption or cancellation and more.

Flight cancellations and resulting delays are so common that we have looked into how travel insurance policies will guarantee your financial assets.

Does Travel Insurance Help if the Airline Cancels Your Flight?

Scenario: Your flight ends up being canceled before you depart and you decide not to go on your trip.

The forfeited airfare is recovered from the airline if you decide against going on your trip after your plane's cancellation. Travel insurance provides a guard against the investments of your trip, providing coverage for unforeseen cancellations and non-refundable events, such as attractions and entertainment.

What the airline covers

Federal law obligates airlines to provide compensation to passengers if a flight is canceled or delayed for several hours and you decide not to travel.

Whether the there's an excuse, the history of a cancellation is open to interpretation. However, a significant delay in travel time remains undefined.

The exactness of the DOT regarding what constitutes a significant retraction has not been defined. When it comes to aviation consumer protection, the DOT website states, What you owe on the ticket largely depends on the duration of the plane or trip, the duration of the flight, and your own particular factors. The DOT looks at on a case-by-case basis whether a delay requires a refund.

What travel insurance covers

If your flight was canceled as a result of specific reasons listed in your travel insurance policy, such as mechanical failure, an airline bankruptcy, or a shutdown of the air traffic control system, your trip cancellation insurance may reimburse you for the nonrefundable canceled flight costs. The coverage will usually cover costs until the designated time of departure.

However, Beckah Morris of Yonder Travel Insurance warns that most likely, your travel insurance won't be any less useful as a result of staffing shortfalls. Therefore, if your flight is canceled due to staffing issues and you decide not to travel, you won't be covered under your travel insurance policy.

Does Travel Delay Insurance Cover Canceled Flights?

Scenario: Your flight is canceled while en route to your destination but you nonetheless want to go on your excursion, as it will result in a delay.

What the airline covers

Your airline will likely put you in another flight when a seat opens up. But that may lead to you having to remain at the airport for some time.

What travel insurance covers

In this instance, travel delay insurance can lend a hand. If your flight is canceled or significantly delayed for the reasons listed in your policy, your trip delay benefits can cover the eligible expenses you incur including lodging, lunch and transport while you wait for the next available flight, as stated by Durazo at Allianz.

Trip delay benefits will apply after a specified length of time in your company's policy. For example, your travel insurance plan could provide benefits after a five-hour delay.

Trip delay coverage will have a per day and an overall maximum benefit limit per person. For example, insurance might reimburse you up to $200 per day, with an overall maximum of $1,000, after a five-hour delay.

Some insurance plans can cover expenses associated with flight delays for you automatically, minimizing your need to file a claim. For example, coverage for the SmartBenefits feature in Allianz Travel's OneTrip Premier plan is valid for up to $100 per day per insured passenger.

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Does Travel Insurance Cover Switching Airlines?

Scenario: Your next flight on your original airline isn t for several days, so you decide to travel on another airline that uses a departure time sooner than your previous airline.

What the airline covers

In some cases, the airline may still refund your original ticket, but often the cost of a last-minute replacement ticket can be more expensive than your original airfare. The carrier won't assist you pay for the difference.

What travel insurance covers

Can you use travel cancellation or travel interruption insurance to replace the difference in cost?

If your aeroline cannot transport you to your destination for at least 24 hours from the time of your scheduled arrival time, a trip cancellation claim may be able to help you get to your destination via another carrier.

You may be reimbursed up to your policy's maximum trip cancellation coverage benefit (minus available refunds) for the reasonable cost of alternate transportation, plus the cost of any lost pre-paid accommodations caused by your covered delayed arrival, says the insurer.

You may also be eligible to file a claim for trip interruption insurance if you have missed at least 50 percent of the length of your trip due to reasons listed in your policy, according to Durazo. Trip cancellation benefits will reimburse you for unused, non-refundable trip expenses that were booked in advance if your trip is disrupted due to unforeseen circumstances.

To summarize the benefits, make sure you inform all of your travel suppliers, hotels, tour operators, tour guides, 72 hours prior to finding out that your trip may be rescheduled or canceled.

Does Travel Insurance Cover Canceled Connecting Flights?

Scenario: Your connecting flight has been canceled. What are your alternatives?

What the airline covers

Your airline may attempt to put you in another flight, which may necessitate a lengthy wait time. If you would rather purchase a new ticket with an alternative airline, you may have the chance to get a refund for your original cancelation.

What travel insurance covers

Trip cancellation insurance can reimburse up to 150 percent of the non-refundable trip costs, as long as you are interrupted for a qualifying reason. So long as the interruption is specified in your policy, you are eligible to file a claim for additional costs that vary according to your specific circumstances. Typically, these reasons include mechanical breakdown or flight equipment failure of a plane, a hurricane at your destination and shutdown of air traffic control systems.

If you stick with the same airline, travel insurance delay benefits can pay the additional expenses (such as food or a hotel) incurred while you happen to be waiting for the next available flight, up to the limits of your plan, says Durazo.

What if I Miss My Connecting Flight?

Scenario: Your connecting flight is not canceled, but you miss it because your first flight was delayed.

What the airline covers

In this case, the airline will usually book you on the subsequent flight. If you miss a connection scheduled on somebody else's airline, the airline might book you on a new flight or ticket at no charge or ask you to pay.

What travel insurance covers

If your connecting flight was canceled, you'll be reimbursed for all related costs, including the cost of getting a later flight. Examples of situations in which such a claim might be filed include if you missed a connecting flight because your connecting flight was delayed as a result of a mechanical issue that needed fixing.

If your policy has coverage for missed connections, you can use it as well. Coverage for missed connections reimburses you for expenses if you should change your plans after missing a flight that was owing to an unanticipated situation. If you miss a flight or acquire a new ticket due to a storm, you may be reimbursed for the costs you accumulated as a result.

It's possible that you will benefit from missed connection coverage in a comprehensive travel insurance policy or purchased separately as supplementary coverage if you need it.

For example, Berkshire Hathaway Travel Protection does not offer missed connection coverage in its ExactCare Value plan, but you can upgrade to ExactCare or LuxuryCare, both of which include it.

Can I Extend My Travel Insurance Coverage?

In the case that you experience travel delays owing to a canceled flight, it may take longer for you to get home. Most travel insurance plans will extend coverage until you reach home, or for seven days following the original end date of your trip, in which case it stays the same. 

Travel delay benefits and paid interruption cover expenses except curtailment is in effect for you, so interruption benefits can be used to pay for additional costs to get home. Reasonable extra costs for necessities are also covered.

An average cost of travel insurance is five to 6 percent of your trip's costs, according to a Forbes Advisor analysis of travel insurance charges. For a $5,000 trip, the average travel insurance outlay is $228, so you may conclude that it's a worthwhile investment.