With COVID travel restrictions easing, more people are beginning to book vacations and trips back home to see loved ones. However, new COVID variants such as delta and omicron, as well as airline staffing issues, means that more flights are getting canceled. This leaves many would-be travelers wondering: Why is travel insurance important? Does travel insurance cover flight cancellation? Does travel insurance refund flights? Will travel insurance cover me if my trip is cancelled? Let's answer those questions. 

Defining Travel Insurance

Broadly speaking, travel insurance usually refers to trip cancellation insurance. It can be referred to as trip insurance, travel insurance, or trip cancellation insurance. However, it is different than travel medical insurance. 

Learn the difference between travel insurance and travel medical insurance here. 

The primary purpose of travel insurance is to provide coverage for your prepaid, nonrefundable travel expenses in the event that you have to cancel your trip for a covered reason. It can also provide coverage for travel delays, trip interruption, baggage delay, and other ancillary benefits such as loss of passport and emergency cash transfers.

If you want the option to be able to cancel your trip for reasons not covered by travel insurance, you can purchase cancel for any reason (CFAR) insurance. 

Will Travel Insurance Cover My Canceled Flight?

Travel insurance can provide coverage for your prepaid, nonrefundable travel expenses. If your flight is taking off and/or landing at a U.S. airport and is canceled (domestic or international flight), you’re covered by the rules put in place by the U.S. Department of Transportation (DOT). These rules state that if your flight is canceled, no matter the reason, you’re entitled to a full refund back to your original form of payment for the unused portion of your itinerary.

This means that the airline is required by law to refund you for the canceled flight. You cannot make a claim for a refund through your travel insurance, since you are already entitled to a refund through the airline. 

Even if the airline tries to offer you vouchers or credits instead, remember that if the canceled flight was to or from a U.S. airport, they are legally required to refund you per the Department of Transportation. 

If the Airline Will Refund Me, Why Get Travel Insurance?

First off, not all flights take off or land in the U.S., and therefore aren’t governed by U.S. DOT refund rules. If your flight is canceled and the ticket is nonrefundable, you may be able to make a claim for reimbursement with your travel insurance provider. 

It’s also important to consider that even if the airline refunds you for a canceled flight, you still need protection from other nonrefundable trip expenses. Consider the money you’ve already paid for your hotel or rental car, event or attraction tickets. If your flight is canceled, you will want a way to be reimbursed for these costs as well. Travel insurance can provide a way to get that reimbursement. 

The important step is to read your policy carefully, so you understand what is covered by it, and what is not. This way, you can make an informed purchase, and travel with less worry about unplanned cancellations or delays.