During the recent Halloween weekend, thousands of travelers encountered a nightmare when American Airlines canceled over 1,700 flights across the country. Canceled flights from Southwest totaled over 2,000 during a long weekend earlier in the month. As the holiday season ramps up, the likelihood of a canceled flight affecting your travel plans figures to increase.
The two airlines attribute the canceled flights to bad weather and staffing shortages. Increased travel demand and limited fuel supply are also issues that impact most air carriers as travelers return to airports after a long pandemic.
Whatever the reason, flight cancelations leave travelers scrambling to make alternative plans at the last minute. If you’re lucky, you simply need to book another flight.
But too often, you might face long delays at the airport, where you’ll have to pay for overpriced food while you wait. Or, perhaps the next available flight isn’t until the next day, which means you may have to foot the bill for an overnight hotel stay. The unexpected expenses can mount quickly and put an immediate burden on your finances.
If you’re looking for relief, a credit card with the right kind of travel insurance can help you save money and offset unexpected expenses if you face a trip interruption or a canceled flight.
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What Is Trip Cancelation and Interruption Insurance?
Trip cancelation insurance reimburses you if covered events prevent you from traveling. Similarly, trip interruption insurance kicks in when covered circumstances occur and interrupt your scheduled travel itinerary.
By itself, being a cardholder does not entitle you to reimbursements for canceled or interrupted flights. To take advantage of trip insurance, you must book the arrangements with a credit card that offers the travel protection you wish to use (see the best travel credit cards here).
Trip coverage amounts vary by the card, from $1,500 to $20,000 per person. Covered incidents also differ between the various credit cards, but circumstances that are often covered include:
- Severe weather
- Illness, injury, or loss of life
- Jury duty
- Court subpoena
- Military orders
- Physician- ordered quarantine
- Terrorist incident
It’s always wise to review your trip insurance before you travel, especially in light of the recent rash of canceled flights. If you’re shopping for a new credit card, make sure you understand the terms of agreement before you apply. Keep in mind, credit cards often impose an annual cap on trip cancelation and interruption insurance.
What’s Covered Under Trip Cancelation and Interruption Insurance?
We’ve seen the types of events and incidents that are covered by trip cancelation and interruption insurance. But what kinds of expenses are covered?
Generally, covered expenses include non-refundable prepaid land, sea, and air arrangements charged by a travel supplier. So, suppose your travel plans were canceled or interrupted by a covered incident. In that case, the types of expenses for which you may receive reimbursement are bookings you’ve made through an eligible travel provider, such as an airline, cruise line, hotel, travel agency, or another common carrier.
Typically, you won’t be covered for tickets to events or prepaid purchases you’ve made to theme parks, museums, and other points of interest — unless they are included in a travel package.
If your trip is interrupted by a covered event, your card’s travel insurance may reimburse you for change fees and any charges to drop a rental vehicle off at another agency location. You may also be covered if your personal vehicle must be relocated to your home.
Since coverage varies between different credit cards, check the benefits guide or contact your benefits administrator to confirm what travel expenses your credit card covers.
What Travel Protection Doesn’t Cover
Travel insurance can be a welcome relief when you’re dealing with unexpected expenses due to trip cancelation or interruption. However, trip insurance doesn’t cover every circumstance.
You may not be covered if your travel plans change due to:
- A change in your plans not caused by the airline
- A concern of becoming ill
- A self-inflicted injury or pre-existing condition
- A change in your financial situation
- A travel agency or tour operator cancels or changes your travel arrangements
As mentioned earlier, you also won’t be covered if you don’t use your card to pay for your trip.
What Other Travel Protections Can Help You?
Besides trip cancelation and trip interruption protection, many credit cards offer other travel benefits that can help if you’re in a bind.
- Travel accident insurance: In the unfortunate event of accidental death or dismemberment, you or your beneficiaries may be eligible to receive a financial benefit.
- Trip delay insurance: If your flight is delayed or canceled, this trip delay insurance may provide compensation up to a covered amount to help pay for extra expenses, such as a hotel stay or meals.
- Baggage insurance: If the airline loses your luggage or delays its shipment for a specified amount of time, you may receive a reimbursement to offset the cost of your baggage and belongings.
- Medical treatment: This type of insurance coverage may cover your medical expenses if you are hurt in the course of your travels.
- Rental car coverage: This coverage reimburses you for theft and damage when you use your card to rent a vehicle, and you decline the rental company’s insurance. Typically, the coverage is secondary, meaning it will only pay for expenses that aren’t covered by your existing auto insurance. As such, you’ll need to file a claim with your personal auto insurance carrier first.
If rental car coverage is a priority for you, look for a card that offers primary coverage. Primary insurance is advantageous because it kicks in first, before your personal auto insurance carrier. This means you won’t have to file a claim with your auto insurance company and potentially trigger a permanent rate increase.
Because coverages vary from card to card, you’ll want to read your card agreements and book your trip using the card that offers the best travel protection.
How to File Your Credit Card Travel Insurance Claim
Remember this word if you have to file a travel insurance claim: Documentation.
Your claim will process more efficiently if you have documentation that demonstrates the financial loss you suffered due to a trip cancelation or interruption. If your trip is interrupted and you have to buy extra meals, an overnight hotel stay, and a cab ride to the airport, keep those receipts. If you can provide documentation for covered expenses, you may receive reimbursement up to the capped amount for that benefit.
Here’s how you can file a claim with several major credit card companies, or you can check your online account or the Guide to Benefits that came with your card.
- American Express: File a claim over the phone.
- Chase: File a claim online or over the phone.
- Citi: Citi no longer offers trip cancelation or trip interruption service as of September 2019.
- Mastercard: Call the Benefits Administrator or file online.
- Visa: Call the Benefits Administrator or file online for faster processing.
FAQs About Canceled Flights
Can you get your money back if you cancel flights?
Generally, trip cancelation and interruption insurance will not cover you if you have to cancel your flight due to a change in your plans, financial situation, or other factors outside of the airline’s control. You also are unlikely to receive coverage benefits if a travel agency or tour operator cancels or changes your travel plans unless those arrangements are part of a tour package.
However, the Department of Transportation (DOT) explicitly states you are entitled to a full refund if your airline cancels your flight for any reason with no exceptions.
Often, the airline will offer a voucher for a future flight instead of a refund. Typically, the voucher is only valid on that airline. It’s legal for the airline to extend this offer to you. It’s also legal for you to decline the offer and insist on a full refund with your original form of payment. Learn more about getting refunds on a credit card.
Do airlines have to refund your money?
As mentioned above, the airline is legally bound to refund your money whenever it cancels your flight. If you wish, you may accept a ticket or monetary voucher instead of a refund, but that is your choice.
Of course, you’re not legally entitled to a refund if you have a change of plans and cannot fly. That said, many airlines have loosened their refund standards, particularly during the pandemic, but their policies change regularly. If you need to cancel your flight, check with the airline’s website to see its current refund policy.
Is credit card travel insurance worth it?
Generally, trip cancelation and interruption insurance come at no extra cost other than the credit card’s annual fee. Still, you don’t have to pay a hefty yearly fee to get travel insurance. If you’re paying a substantial amount for a nonrefundable vacation, getting travel insurance may be worth it.
Does travel insurance cover changing your mind?
No. A credit card’s trip insurance only applies to covered reasons for canceling your trip. For example, many credit cards’ travel insurance will cover cancelations due to a severe illness, jury duty, or a physician’s orders to quarantine, among other reasons. Check your credit card’s benefits guide or terms and conditions to determine the specific circumstances your travel insurance will cover.