Some airline companies were having problems financially during the year 2008, and there were rumors of mergers among other airlines that were more financially stable. If this happens, are your flights transferred to another company? And what happens when the flight gets delayed or even cancelled?
The easy answer is that travel insurance covers your money but it certainly will not cover your trip. In most cases you would get a refund when your flight gets delayed or cancelled but if doesn’t then that’s where insurance would be of help. To avoid these circumstances, ask before paying for your trip. Buying online provides a lot of good deals, but unfortunately it may not be able to answer your questions like a representative could.
Normally, an airlines financial failure would be included in the trip cancellation policy. This is where you want to note any conditions on that policy to see if it lists any exclusion. The insurance will not cover financial failure if the insurance company fails, but it would cover the airline. Be certain of what you are paying for because in some cases when you buy just a minimum policy, it may not help in times of financial failure at all. Be aware of the fine print on cheap travel insurance policies.
Financial failure coverage may also be considered as an unforeseen circumstance. You should be careful with some companies that regard financial failure as unforeseen and therefore is not covered by your insurance policy. This is an example of another loophole that companies make up so they don’t have to be financially responsible. This is why you must be careful when shopping for policies such as one way travel insurance.
One last thing to keep in mind regarding financial failure is that many airline companies declare bankruptcy and still operate business as usual until they merge with another airline company.
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