Flight Cancellation Insurance (2024)

Airline staff shortages combined with a surge of vacationers are contributing to hundreds of flight cancellations on many days.

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

“A flight delay or cancellation may be the first domino to fall when things start to go wrong on a vacation,” says Daniel Durazo, a spokesperson with Allianz Global Assistance. “Up your game and be prepared for the unexpected with a travel insurance policy that provides benefits for travel delay, trip interruption or cancellation and more.”

Since flight cancellations and resulting travel delays are so common, we’ve outlined how a travel insurance policy’s benefits can provide you with a financial safety net.

Related: Flight Insurance

Does Travel Insurance Help if the Airline Cancels Your Flight?

Scenario: Your flight is canceled before you depart and you choose not to go on your trip.

If you decide not to go on your trip after your flight is canceled, the airfare refund is handled by the airline, says Durazo. “However, for travel expenses besides flights, a travel insurance policy protects your total trip investment by providing refunds for pre-paid, non-refundable expenses like excursions and accommodations when the trip is canceled for a reason covered by the policy.”

What the airline covers

If the airline cancels your flight or there is a “significant delay” and you choose not to travel, federal law mandates that the airline refund your ticket cost.

“This is the policy regardless of the reason the airline cancels or delays the flight. However, what ‘significant delay’ [means] remains open to interpretation,” says Durazo.

The DOT has not defined exactly what constitutes a “significant delay.” When it comes to aviation consumer protection, the DOT website explains, “Whether you are entitled to a refund depends on many factors—including the length of the delay, the length of the flight, and your particular circ*mstances.” The DOT determines if delays require a refund on a case-by-case basis.

What travel insurance covers

If your flight was canceled due to specific reasons listed in your travel insurance policy—such as mechanical failure, the bankruptcy of the airline or a shutdown of the air traffic control system—your trip cancellation insurance can reimburse your forfeited, non-refundable trip costs. A policy will generally cover costs up to the time and date of your departure.

However, Beckah Morris of Yonder Travel Insurance warns that most other reasons might be excluded. That means if your flight is canceled due to staffing shortages and you decide not to travel, you may not be covered by your travel insurance plan.

In this scenario, even “cancel for any reason” (CFAR) coverage might not help cover your money lost. CFAR is an upgrade you can buy to receive partial reimbursem*nt when you scuttle a trip for reasons beyond what’s listed in your policy. But CFAR benefits only apply if you cancel at least 48 hours before your departure. Therefore, if you decide to cancel a few hours before your original scheduled departure time, you likely won’t be eligible to file a CFAR claim.

Does Travel Delay Insurance Cover Canceled Flights?

Scenario: Your flight is canceled before departure but you still want to go on your trip, even though it will mean a delay.

What the airline covers

Your airline will typically put you on the next available flight with available seats. But this may leave you waiting at the airport for hours.

What travel insurance covers

In this case, travel delay insurance can help. “If your flight is canceled or significantly delayed for a reason listed in your policy, your trip delay benefits may reimburse eligible expenses incurred—including lodging, meals and transportation—while awaiting the next available departure,” Durazo at Allianz says.

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

Trip delay coverage will have a per day and a total 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 travel insurance plans can reimburse you for delay-related expenses automatically so you don’t have to file a claim. For example, the SmartBenefits feature in Allianz Travel’s OneTrip Premier plan provides $100 per insured person, per day for a delay covered by the policy.

“Rapid digital payments make it easy to grab a bite while you’re stuck at the airport without taking a bite out of your wallet,” says Durazo.

Does Travel Insurance Cover Switching Airlines?

Scenario: Your flight is canceled before your departure. The next flight on your original airline isn’t for several days, so you decide to travel on another airline with flights leaving sooner.

What the airline covers

In many cases, the airline will still refund your ticket. But you may find the cost of a last-minute replacement ticket is more expensive than your initial airfare. The airline won’t help you cover the difference.

What travel insurance covers

Can you use travel cancellation or travel interruption insurance benefits to make up the difference in cost?

Durazo says when your travel carrier is unable to get you to your original destination for at least 24 consecutive hours from the time you were scheduled to arrive, a trip cancellation claim may help pay to get you to your original destination via another carrier.

“You can 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,” he says.

Also, you may be able to file a trip interruption travel insurance claim if you miss at least 50% of the length of your trip due to a reason listed in your policy, says Durazo. Trip interruption benefits will reimburse you for unused, non-refundable trip expenses that were booked in advance if your trip is interrupted due to unforeseen circ*mstances.

To take full advantage of the benefits, be sure to notify all your travel suppliers—hotels, tour operators, guides—within 72 hours of finding out your trip will be canceled or interrupted, he says.

Does Travel Insurance Cover Canceled Connecting Flights?

Scenario: Your connecting flight is canceled. What are your options?

What the airline covers

Your airline will likely try to put you on another flight, which may mean a significant wait time. If you would rather buy a new ticket with another airline, you may be able to get a refund for your canceled flight.

What travel insurance covers

Trip interruption insurance can reimburse up to 150% of your non-refundable trip costs. As long as your trip is interrupted for a reason listed in your policy, Durazo says you can file a claim for additional expenses you incur to continue your trip or return to your primary residence. Typically, these reasons include mechanical breakdown or equipment failure of a plane, a hurricane at your destination and shutdown of air traffic control systems.

If you choose to stick with the same airline, travel insurance delay benefits can pay for the extra expenses (such as food or a hotel) while you’re waiting for the next available flight, up to the limits in your travel insurance plan, says Durazo.

What if I Miss My Connecting Flight?

Scenario: Your connecting flight isn’t 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 next flight. However, if you miss a connection booked on a different airline, the airline could book you on a new flight at no charge or make you pay for a new ticket.

What travel insurance covers

If you missed your connecting flight for a reason listed in your policy under your trip interruption coverage, you can be reimbursed for the cost to catch up to your itinerary. For instance, you can file an interruption claim if you missed a connection because your first flight arrived late due to a mechanical issue that needed to be resolved.

If your policy includes coverage for missed connections you can also turn to that. Missed connection coverage reimburses you for money spent when you change your travel plans after missing a connecting flight for an unforeseen event. For example, you can recoup fees charged for rescheduling your flight or money spent buying a new ticket if a storm causes you to miss your connection.

Missed connection coverage is typically part of a comprehensive travel insurance policy and not always found in basic travel policies. If you want missed connection coverage, you may have to upgrade your travel insurance plan or buy it as supplemental coverage.

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

Can I Extend My Travel Insurance Coverage?

If you experience travel delays caused by a canceled flight, it may take you longer than expected to get home. Most travel insurance plans extend coverage until you reach home, or for seven days after the original end date of your trip, whichever comes first. That means all coverage except trip cancellation is in effect for you to use, so you can use interruption benefits to help pay for extra costs to get home and travel delay benefits for reasonable extra costs for necessities.

In order for extended coverage to apply, your delayed return must be for an unforeseen event that’s listed under trip cancellation, trip delay or trip interruption coverage in your policy.

The average cost of travel insurance is 5% to 6% of your trip costs, according to a Forbes Advisor analysis of travel insurance rates. For a $5,000 trip, the average travel insurance outlay is $228, so you may find that it’s a worthwhile investment.

U.S. Airports With the Most Cancellations Last Week

Here’s a list of the U.S. airports that saw the most flight cancellations last week.