Going on vacation? Here’s how the jet fuel crisis could affect your travel insurance

Genevieve Beauchemin looks at how travellers could be impacted as airlines across the world cancel numerous flights amid the ongoing jet fuel shortage.

MONTREAL — The jet fuel crisis that has scrubbed thousands of flights worldwide has travellers counting how much money they could lose and whether their insurance will protect their wallets. The answer to that is not entirely clear, and experts call this uncharted territory for the industry.

“If you have travel insurance, call your company, call the insurer,” said CAA-Quebec travel insurance expert Nadia Goyette. “The policy wording is sometimes hard to understand. These are legal terms that are not always easy to understand.”

Stephanie Hallot Lamoureux booked a dream European family vacation that included a Baltic cruise. Now the Kanata, Ont. resident is concerned she could be out thousands of dollars if her flight is cancelled and she misses the connection with her ship.

“I know Air Canada will re-book us or give us our money back, but the cruise? No, they won’t,” said Lamoureux. “I have already been in touch with my credit card (company), they won’t cover my cancellation.”

Airlines are responsible for rebooking passengers on a flight within 48 hours of a cancelled flight, or to offer a refund. But they’re not responsible for expenses like bus tours, hotels or cruises that are booked as part of a trip. Several travel insurance policies can generally cover these costs.

“Once the flights are cancelled, if travellers don’t make their cruise or they don’t get to their Airbnb rental, they make a claim, they submit the receipts, they get reimbursed,” said Martin Firestone, president of Travel Secure Inc. “That’s now not going to be the way it’s going to go.”

Firestone says the jet fuel crisis is now a known cause for cancellations, so travel insurance policies purchased from now on may not cover those costs. He says travellers must plan their trips carefully.

“You have to be wise enough to figure out your schedule and itineraries to give yourself the days you’re going to need if your flight doesn’t leave on the day it was supposed to,” said Firestone. “So really, the knowledgeable person will be fine. The one who isn’t aware of what’s going on is going to be in for some very rude surprises.”

Goyette says one option for travellers is to check whether their insurance has a clause that allows for cancellation or interruption of travel for any reason. That clause is relatively new to the market.

“If you do have that extra guarantee of ‘cancel for any reason’ or ‘interrupt for any reason,’ then you will have some coverage. It’s not a 100 per cent of what you had prepaid, but it still it could be up to 50 to 80 per cent.”

Those who booked prior to this unprecedented crisis could also hit cost coverage roadblocks. Most travel insurance policies include a war exclusion clause that voids claims linked to conflicts.

While that generally doesn’t cover operating issues like fuel, some insurers could potentially consider the crisis as related to the war in the Middle East.

Goyette says the key is to look closely at your policy, whether it is linked to private or group insurance, as well as credit card coverage. She also says that reviewing group and credit card policies frequently is important to spot any change in coverage.

“You dream about a trip and you plan for a long time,” said Goyette. “You saved up to pay for that trip, and you don’t want to have all that ruined. You want to leave knowing everything was well taken care of.”

Lamoureux says she had considered that a medical reason could surface and scrap the vacation, but she never imagined a jet fuel crisis could prevent her from getting to Europe, leaving her footing a bill for a cruise she can’t board.

“All I can do now is hope and keep my fingers crossed that the flight will take off.”