Can travel insurance help you avoid a summertime airline hassle? That’s what happened to Ruth White’s daughter, Maya, whose airline recently canceled her flight from New York to San Francisco.
“She had to spend a night in a hotel in New York,” recalls White, a professional speaker based in Bloomfield, N.J.
Good thing I had annual travel insurance through Allianz which covered travel delays. He took care of the $220 that Maya had to pay for her unexpected overnight stay in New York.
“It was great to know our policy covered it,” she adds.
She is not alone. Berkshire Hathaway Travel Protection’s latest State of Travel Insurance report finds that fear of flight cancellations and delays is the number one reason people buy travel insurance.
“During the airline troubles last summer, we experienced an increase in trip interruptions, trip delays and baggage claims,” recalls Tim Dodge, vice president of marketing at Arch RoamRight.
“When flights were cancelled, with no new flights for days, stranded passengers had unexpected expenses while they waited for their new flights.”
Why Summer Travelers May Need Insurance
If ever there was a summer that needed saving, this is it.
“The likelihood of another series of crashes is as high as the mercury will be,” said Matthew Colbert, principal consultant at Empire Aviation Services, an aviation strategy consultancy.
Colbert has a long list of reasons why airplane travelers can experience disruption. These include summer climate challenges and persistent staff shortages. It’s so bad that the Federal Aviation Administration recently asked airlines to cut back on flights to always-congested New York.
“And the challenges in New York are also occurring at FAA air traffic facilities across the country,” he adds.
Terry Boynton, president of Yonder Travel Insurance, says travelers are understandably worried. “More travelers are buying travel insurance to reduce this risk,” he says.
But how can travel insurance help? And are there any new ways reliable travel insurance can help you if you find yourself in another airline meltdown this summer?
How can travel insurance help with airline issues?
Travel insurance can provide protection in the event of delays, according to Stan Sandberg, co-founder of travel insurance site TravelInsurance.com.
Among the advantages:
- Travel delay cover will help cover the extra costs of accommodation, food and transport if an airline is delayed for an extended period.
- The Baggage Delay Cover will help you replace your essentials while you wait for your luggage.
- Travel interruption cover can help recover non-refundable travel costs lost as a result of unexpected work interruption. Sandberg says the likelihood of a strike is much higher this summer than last year.
“Travel insurance can take the sting out of these types of travel disruptions,” he says.
Most travel insurance policies have these standard protections, although the amount of cover varies.
Travel insurance can also protect the rest of your trip
Of course, people don’t just buy travel insurance for the benefits of airline coverage. A comprehensive policy can also cover the remainder of your holiday if an airline disruption results in a missed night or tour cancellation.
“If you’re worried that a flight cancellation could result in you losing money on other parts of your trip – a missed tour or unused hotel nights – travel insurance can help,” says Angela Borden, product strategist at Seven Corners.
But wouldn’t buying a fully refundable ticket cover some of that risk? Not quite, she says.
“This is one of the biggest differences between a refundable airline ticket and travel insurance,” she explains. “A refundable ticket will not normally cover pre-paid, non-refundable expenses such as a tour or hotel, but you may be able to receive reimbursement through travel insurance benefits.”
What are some new ways travel insurance can cover your flight?
Has travel insurance learned any new tricks over the past few years that could help you protect yourself from a mid-flight meltdown? Absolutely.
Most travel insurance now covers COVID-19, which can protect you if you get sick before your flight. Companies like Covac Global offer policies that will get you home without any of the typical restrictions imposed by travel insurance companies.
Another little-noticed improvement: 24/7 support services. Recently, travel insurance companies have been adding them to their policies.
“Many travel insurance policies include 24/7 assistance services that can provide you with support and guidance in the event of an airline breakdown,” says Pallavi Sadekar, Head of Operations at VisitorGuard.com. “These services can help you navigate the situation, find alternative travel arrangements and get the support you need.”
Travel assistance can cover many of the tasks that a traditional travel advisor would, helping you find alternative transport or accommodation options when your flight is cancelled. Some policies offer access to medical and legal advice.
What else is new about airline coverage?
Many travel insurance policies now pay ‘inconvenience’ benefits, also known as parametric benefits. These benefits affect airline passengers perhaps more than any other traveler.
“There has been a big increase in the availability of travel inconvenience benefits, giving travelers a little cash to smooth things over during common scenarios such as flight delays, flight cancellations and lost or delayed luggage,” says Daniel Green, co-founder of Fay Travel Insurance. “More travel insurance providers have activated parametric benefits that get customers that money faster when things go wrong.”
How does parametric benefit work? It’s simple. If you miss your flight, your travel insurance company will cover the event on your policy, but they’ll also send you $100 for the inconvenience.
How to buy travel insurance for your next flight
Rule number one: read your policy. Carefully.
Tera Baikal, senior marketing manager at World Nomads, says benefits vary by country of residence and insurer. “So be sure to read your policy in its entirety.”
“It’s also important to note that most insurers won’t reimburse you if your flight is delayed and you decide to buy a flight on a different carrier,” Baikal says. “You will need to work with your airline to be rebooked. However, insurance may step in if your flight is completely canceled and your airline is unable to rebook you.’
If you are unsure about your cover, contact your travel insurance company before booking a new ticket.
Also, make sure your insurance covers flight delay.
“With a chaotic summer travel season forecast, get a travel insurance plan that also includes fixed benefit payouts for the inconvenience of a disappointing trip,” says Carol Mueller, vice president of Berkshire Hathaway Travel Protection.
For example, Berkshire Hathaway Travel Protection has a specialized plan called AirCare that pays out benefits for common inconveniences, including flight delays, interruptions, diversions and cancellations, missed connections, lost or delayed luggage, and tarmac delays. There’s also another policy, the ExactCare Extra policy, with traditional travel insurance coverage but also inconvenience payments for travel headaches like $50 for a flight delay, $100 for a missed connection or $1,000 for a tarmac delay.
These payments are in addition to traditional travel delay coverage, which requires your delay to be five hours or more and only pays up to a certain limit per day, Mueller says.
The last word on insurance this summer
If you’re paying for travel, lodging, tours, or other vacation items this summer, you’ll want to get insurance that covers your non-refundable expenses. Look for new types of coverage like parametric benefits and expanded 24/7 assistance — and don’t forget to be patient.
That would be the advice of Marty Mayne, a lodging industry consultant. She filed a claim on her travel insurance after a flight problem in December. Her travel insurance company made her submit the same documents for proof of cancellation three times.
“It was ridiculous,” she says. “But I did.”
Her insurance company finally paid him in April.
This is a cautionary tale. Travel insurance is a good idea if you’re flying this summer, but if you file a claim, be prepared to wait.