Flight delays and cancellations are in the news right now because of the safety inspections that are being required by the FAA. Questions are being raised as to whether or not there is coverage under travel insurance policies for trips that are being affected.
It really depends on the company and plan that a person has chosen. There are possibly several areas that might offer some coverage;
- Trip Cancellation: this type of coverage involves canceling a trip due to a “covered reason” and provides reimbursement for the non-refundable fees if you have to cancel your tip because of the covered reason. In the insurance industry we call this type of coverage “named peril” because the “peril” has to be named by the insurance company within the policy for the cancellation to be covered. These “perils” are very specific and most trip cancellation coverages would not cover the cancelled flights by AA. Only one company provides for “mechanical” delays of an airline that cause your to miss your flights.
- Trip Interruption: this is almost identical coverage to trip cancellation except you’re already on your trip and a “covered reason” occurs that causes you to interrupt your trip and return home at a time that is unscheduled. This coverage usually pays for the non-refundable, unused portion of your trip and up to the economy airfare to return home. The perils for this coverage are, for most plans, the same as trip cancellation. There are two companies that provide coverage for “mechanical” delays of an airline.
Missed connection: a few of the plans offer this benefit. It’s designed to provide a modest benefit if there is a delay of more than a couple of hours by the airline in getting you to a connection. It usually provides for additional transportation to get caught up to your trip and additional living expenses. The benefit is usually limited to a maximum amount with some plans offering $500. in total.
- Travel delay: this is a common benefit found in most plans and will pay if a client is already on their trip and there is a common carrier delay of more than X hours (varies from 5 to 12 hours depending on the plan). It provides for additional living expenses while the traveler is delayed and is limited to a per day maximum and a policy maximum. As an example some policies will provide for $150 per person per day for a maximum of $750.
Of the 4 benefits that I’ve listed the most common ones are the missed connection and the travel delay. Statistically, I would think that more people would be impacted who were already on their trip than those just leaving. You should also look at the plan exclusions as some plans that might appear to have coverage might exclude any flight cancellation or delay that is caused by a government action. As always make sure you read the policy provision carefully before you decide which coverage is best for you.