Can travel insurance help you avoid a summer airline problem? It did for Ruth White’s daughter, Maya, whose airline canceled her flight from New York to San Francisco recently.
“She had to spend a night in a hotel in New York,” remembers White, a professional speaker based in Bloomfield, NJ
Good thing she had an annual travel insurance policy through Allianz that covered trip delays. It took care of the $220 Maya had to pay for her unexpected overnight stay in New York.
“It was great to know that our policy covered it,” she added.
She’s not alone. Berkshire Hathaway Travel Protection’s latest State of Travel Insurance report finds that fear of flight cancellations and delays is the top reason people buy travel insurance.
“During last summer’s airline troubles, 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 canceled, with no new flights for days, stranded travelers had unexpected expenses while waiting for their new flights.”
Why summer air travelers may need insurance
If there’s ever been a summer that needs saving, it’s this one.
“The likelihood of another series of meltdowns 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 air travelers may experience disruptions. They include summer weather challenges and persistent staffing shortages. It’s so bad that the Federal Aviation Administration recently asked airlines to reduce their flights into always-congested New York.
“And the challenges in New York are also occurring at FAA air traffic facilities across the country,” he added.
Terry Boynton, president of Yonder Travel Insurance, says passengers are understandably worried. “More travelers are buying travel insurance to mitigate this risk,” he says.
But how can travel insurance help? And are there any new ways that a reliable travel insurance policy can help if you get caught up in another airline meltdown this summer?
What can travel insurance do for airline problems?
Travel insurance can provide protection in case of delays, according to Stan Sandberg, co-founder of travel insurance site TravelInsurance.com.
Among the benefits:
- Travel delay coverage will help cover extra costs of lodging, food and transportation if an airline is delayed for an extended period.
- Baggage delay coverage will help replace essentials while you await your luggage.
- Trip interruption coverage can help refund non-refundable trip expenses lost as a result of an unexpected work stoppage. 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 protections standard, although the amount of coverage varies.
Travel insurance can protect the rest of your trip, too
Of course, people don’t just buy travel insurance for the airline coverage benefits. A comprehensive policy may also cover the rest of your vacation if an airline disruption leads to a missed night or tour cancellation.
“If you’re worried a flight cancellation could cause you to lose money on other parts of your trip – a missed tour or unused hotel nights – travel insurance can help,” says Angela Borden, a product strategist at Seven Corners.
But won’t buying a fully refundable ticket cover some of that risk? Not really, she says.
“This is one of the biggest differences between a refundable ticket from an airline and travel insurance,” she explains. “The refundable ticket usually won’t cover prepaid, non-refundable expenses like the tour or hotel, but you can receive a reimbursement through travel insurance benefits.”
What are some new ways travel insurance can cover your flight?
Has travel insurance learned any new tricks in the last few years that might help protect you against a summer air travel 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 back home without any of the typical restrictions travel insurance companies impose.
Another little-noticed improvement: 24/7 assistance services. Travel insurance companies have been adding these to their policies recently.
“Many travel insurance policies include 24/7 assistance services, which can provide you with support and guidance in the event of an airline meltdown,” says Pallavi Sadekar, head of operations at VisitorGuard.com. “These services can help you navigate the situation, find alternative travel arrangements, and get your needed support.”
Travel assistance can cover many of the tasks that a traditional travel advisor would, helping you find alternative transportation options or accommodations when your flight gets cancelled. Some policies offer access to medical and legal advice.
What else is new for 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’s been a big increase in the availability of travel inconvenience benefits, which gives travelers a little bit of money to smooth things over during common scenarios like flight delays, flight cancellations and lost or delayed luggage,” says Daniel Green, co-founder of Faye Travel Insurance. “More travel insurance providers have enabled parametric benefits, which get customers that money more quickly when things go wrong.”
How does a parametric benefit work? It’s simple. If you’ve missed your flight connection, your travel insurance company will cover the event under your policy, but also send you $100 for the inconvenience.
How to buy travel insurance for your next flight
Rule number one: read your policy. Carefully.
Terra Baykal, a senior marketing manager at World Nomads, says benefits vary by country of residence and by insurer. “So be sure to read your policy in full.”
“It’s also important to note that most insurers will not reimburse you if your flight is delayed and you decide to buy a flight with a different carrier,” said Baykal. “You’ll need to work with your airline to be rebooked. However, insurance may step in if your flight is completely canceled and your airline can’t rebook you.”
If you’re not sure about your coverage, contact your travel insurance company before booking a new ticket.
Also, make sure your insurance covers a flight delay.
“With predictions for a chaotic summer travel season, get a travel insurance plan that also includes fixed benefit payouts for being inconvenienced by a frustrating travel experience,” says Carol Mueller, vice president of Berkshire Hathaway Travel Protection.
For example, Berkshire Hathaway Travel Protection has a specialized plan called AirCare that pays benefits for common inconveniences, including flight departure delays, disruptions, diversions and cancellations, missed connections, lost or delayed baggage and tarmac delays. It also has another policy, ExactCare Extra policy, with traditional travel insurance coverages but also inconvenience payments for travel headaches, such as $50 for a flight departure delay, $100 for a missed connection, or $1,000 for a tarmac delay.
Those payments are on top of the traditional trip delay coverage, which requires your delay to be five or more hours and only pays up to a certain limit per day, says Mueller.
The last word on insurance this summer
If you’re paying for travel, accommodations, tours or other items for a vacation this summer, you’ll want to get insurance that covers your non-refundable costs. Look for new coverage types like parametric benefits and expanded 24/7 assistance — and don’t forget to pack your patience.
That would be the advice of Marti 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 proof of cancellation documents three times.
“It was ridiculous,” she said. “But I did it.”
Her insurance company finally paid him in April.
That’s 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.