A question came up today about charter airline flights and what if any consumer safeguards are in place for travelers who use them. The question centered on what would happen if the tour operator canceled the trip; would travel insurance pay?
The answer is maybe! It depends on the reason why they canceled the trip. If it was canceled because the tour operator is declaring bankruptcy than most “package” plans will provide coverage under the default/bankruptcy peril of the trip cancellation/interruption coverage.
However, what happens if the tour operator cancels the flight and still stays in business? Are you at risk for losing your money? Probably not! First, when you fly on a charter flight you have an agreement with the airline called a “participant contract” that you should sign that outlines your rights and obligations. These contracts have a provision that outlines your rights in the event of cancellation:
- If you cancel – it outlines your right of refund for the money that you’ve already paid. This is the amount of non-refundable money that is usually covered under trip cancellation coverage if you cancel for covered reasons or if you have the “cancel for any reason” option that some plans are now offering.
- If the tour operator cancels – it outlines when they can cancel and your right to a refund. Generally they can cancel a flight due to lack of participation more than 10 days prior to the scheduled departure date. If they cancel your trip than regulations require that they must refund you in full. That means that the money is refundable and therefore is not covered under travel insurance plans because it’s the responsibility of the tour operator to refund it to you.
- If there is a major change in your trip – regulations say that if there is a major change to your trip than they must allow your to cancel penalty free. Major changes are considered to be: a change in your departure or return cities; a change in your departure or return date; a substitute hotel that wasn’t named as an alternative in your contract; an increase in price of more than 10% (no increases are allowed within 10 days of departure).
For more information about your rights you can visit the Department of Transportation, Aviation Consumer Protection Division.