Are you covered for strikes this summer? Check your travel insurance policy now
Summer sun and blue skies may be just around the corner. However, if you're in the aviation industry, clouds of discontent still loom on the horizon.
In Europe, the ongoing rash of strikes and protests continues to have a domino effect on the air travel industry, potentially affecting the vacations of thousands of travelers.
In the United Kingdom, British Airways canceled 300 flights over Easter after Heathrow Airport (LHR) employees announced 10 days of strikes between March 31 and April 9 over pay and work conditions. U.K. border guards plan to walk out April 28, which could lead to long lines, delays and cancellations.
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Similar disputes are raging in Germany and France, where a series of nationwide strikes and protests over pay and other complaints have repeatedly halted planes and trains.
Things don't bode well in the U.S., either. United Airlines, American Airlines and Delta Air Lines — which together handle about two-thirds of domestic air traffic — are currently locked in talks to fend off possible strikes by pilots, flight attendants and mechanics.
If you have upcoming air travel that could be affected by potential strikes, should you purchase travel insurance? If you've already purchased travel insurance, what does it cover? Here are some things to consider.
How do I know if I'm covered for a strike?
Sadly, there is no "one size fits all" answer to whether your travel insurance will cover you in the event of strikes. Different insurers have different approaches.
You should always read the fine print of any insurance policy before signing on the dotted line, according to Michael Pettifer, travel insurance specialist and founder of MPI Brokers.
"There will be a section in most travel insurance policies entitled 'delay' or 'disruption,'" he told TPG. "Whether you are covered for strike action will be in there."
In the U.S., insurers might refer to this as a "delayed trip" or "trip interruption," so it's worth checking for these terms, too.
What should I look for?
American insurer Berkshire Hathaway, which offers "innovative" travel insurance specifically for flights and cruises, breaks down the types of delays covered in its policies. They include "trip delay," "tarmac delay," "flight departure delay" and "missed connection." The amount it pays out depends on your chosen insurance plan.
For example, its ExactCare Extra plan covers a maximum of $200 per day for a minimum five-hour delay. It also offers a $100 "flat benefit" for a missed connection and a $1,000 "flat benefit" for a tarmac delay.
British insurer Saga Travel has a traveler-friendly policy providing a useful template for what to look for.
"If the ship, aircraft or train on which you're booked is delayed leaving the UK after you have checked in, you'll be entitled to £35 after your first 12 hours of forced waiting and £15 for each 12-hour period up to a total of £215 for each insured person under your policy's Delayed Departure section," it says.
This type of policy will even pay out if you miss your flight due to, say, a rail strike on your way to the airport. Naturally, keep an eye on those excess fees if you do claim money back from your insurance.
What am I covered for when a strike delays my trip?
One of the key points, says Pettifer, is that you must "comply with the policy at all times." That means being at the airport when the delay occurs. Typically, you have to have been sitting in the airport for more than 12 hours before you can make a claim. However, depending on the policy, it can be as little as eight hours or sometimes as much as 24 hours.
"The delay policy wordings typically say you're being indemnified under the policy for a loss," Pettifer said. "And your loss is the cost of being at the airport buying extra sandwiches and teas for 12 hours. We call it misery money."
After a certain point, you can cancel your flight, and you will be indemnified for the cost of your ticket, according to Pettifer.
What if my flight is canceled outright due to a strike?
In Europe and the U.S., the airline is responsible for refunding your ticket or placing you on the next available flight when your original flight is canceled. Some airlines will also cover in-airport expenses.
For other expenses, such as the cost of your hotel, Pettifer says that if your ticket has been refunded, an insurer will likely assume you can use it to buy a new ticket and, therefore, won't pay your hotel costs.
"As far as they see it, you have got the money back for your canceled flight, so you've got the money for another flight to get out there," Pettifer explained.
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However, if you cancel the flight yourself, perhaps because you couldn't find an alternative flight to get you where you need to be in time for your vacation, some insurers will cover hotel expenses.
For example, Saga Travel's policy reads: "If you booked a non-package holiday independently, your Saga Travel Insurance policy covers additional unused accommodation and other pre-paid costs that you can't claim back, should you cancel your trip."
Berkshire Hathaway will reimburse you for "reasonable additional expenses" up to your agreed limit, which includes "expenses for meals, taxi fares, essential telephone calls, local transportation, and lodging which are necessarily incurred as the result of Trip Delay and which are not provided by the Common Carrier or any other party free of charge."
Will an insurer pay out if I've already applied for compensation from the airline?
Maybe. A key thing to remember here is that airline compensation is not the same thing as insurance.
As Pettifer says, insurance indemnifies you against losses incurred due to your delay or cancellation. In contrast, compensation is awarded to you by your airline for the damage caused to you by the cancellation, financial or otherwise.
It is a subtle difference but a significant one.
Related: Here's when European airports and trains are set to go on strike
"This is a very big subject," Pettifer said. "The word compensation is bandied around liberally without proper examination of what it is that's being paid and on what basis, and to whom."
"Compensation as a legal term is where you are compensated for damages following an injury or a loss of some kind. The suggestion that an insurance policy, which indemnifies you for a loss, should be called compensation is completely wrong. So if an airline compensates somebody for their loss, that's compensation for damages, not an indemnity."
In other words, he says, you might be able to claim for both.
Are there any catches?
Yes. You absolutely must have taken the policy out before the strike was announced. As soon as strikes are even hinted at, Pettifer says, your chances of being covered for any losses plummet.
Take the recent strikes at Heathrow Airport, for example. Like with many strikes, negotiations have gone down to the wire as the airport wrangles with unions to find a solution and avert a full-scale staff walkout. In this instance, no resolution was found, and British Airways canceled 32 flights a day during that time.
In that case, travelers will have been notified of their canceled flight with little notice. The trouble is, a strike had already been "alluded to," says Pettifer. That's because the news that the Unite Union balloted its members emerged weeks ago.
"Like any insurance, you can't insure your house if it's already on fire," says Pettifer. "There is no such thing as degrees of fire. You can't insure against a little fire in the corner of a room. Well, you might be able to put it out, but there is still a chance you won't. Travel insurance is the same when it comes to something like a strike. If a strike has been alluded to, assume you won't get paid."
It is the same in the U.S.
"The key here is that the strike can't be a known or foreseen event for coverage to apply under travel insurance," said Terry Boynton, co-founder and president of Yonder Travel Insurance. "If you purchase travel insurance after a strike occurs, hoping to be reimbursed for your lost payments, you'll be out of luck"
In other words, it is absolutely critical that you take out your policy on the same day you buy your plane ticket.
What other options do I have?
That depends on where in the world you are.
In the US
Airline compensation rules in the U.S. are much tighter than in Europe. In fact, they don't really exist.
According to the Department of Transportation, "Airlines are not required to reimburse you for any trip costs affected by the cancelled flight, such as a prepaid hotel room, a cruise, a vacation, concert or other tickets, or lost wages."
They are required to refund you the cost of your ticket and "fees tied directly to the airline ticket (such as baggage fees, seat upgrades, etc.)." However, that's as far as it goes.
It does add that each airline has different policies about what it will do for passengers whose flights have been canceled. It recommends that if your flight is canceled, ask the airline staff if it will pay for meals or a hotel room. It indicates that some airlines offer these amenities to passengers, but others don't.
In Europe
If your insurer rejects your claim for any reason, you can likely still apply for compensation from your airline.
The key is to ask whether the strike was over pay and working conditions.
If the answer is yes, you can claim compensation because that is deemed under the airline's control and is therefore not an "extraordinary circumstance."
Related: Are you entitled to compensation if your flight is affected by strikes?
In such a case, the airline is obliged under the EU261 rule (called UK261 in the U.K.) to refund your ticket or offer you a seat on the closest possible alternative flight. If it gives you less than 14 days' notice, you can also apply for compensation of between 220 and 520 British pounds (around $273-$646), depending on the length of your canceled flight.
However, it is different when third-party contractors or ancillary workers not on the airline's payroll are striking.
"A frequent one is when air traffic control staff strike, something that used to happen a lot in France," said Coby Benson, a flight compensation expert with Bott and Co Solicitors. "That seems to be outside the control of the airline."
Bottom line
Travel insurance is a crafty business, with no "one size fits all" policy that covers you for all eventualities.
It's important to always read the terms and conditions before buying a policy while bearing in mind any specific issues that could arise during your trip.
If you are flying with any airline or into an airport whose staff could strike this summer, be sure to check under the "disruption" section to ensure strikes are covered.
But beware: If you are traveling to a destination with an airline where strikes have already been "alluded to" — any airline flying from Heathrow, British Airways, Ryanair or EasyJet — the strikes section of your policy may already have been rendered obsolete.
Within Europe, if insurance doesn't work, you still have the European Union's compensation policy to fall back on, which can likely pay you more than the insurance would.