Travel Insurance vs. Airline Compensation: What’s the Difference?
Your flight has been severely delayed, and you end up arriving at your destination hours late. As a result, you miss out on some of your plans. You know you have air passenger rights that provide compensation, but because you have travel insurance, you’re not sure who covers what or where to file your claim. Can you relate?
Understanding the differences between airline compensation and travel insurance coverage can make a huge difference in whether or not you get money back at all. So keep reading as we explain the differences between the two, what each covers, and when you can get money from both.
How is Airline Compensation Different from Travel Insurance?
Airline compensation is different from travel insurance in many ways.
Airline compensation is a legal entitlement for flight disruptions, specifically denied boarding or baggage mishandling in the US. For flights to the UK or Europe, you can get compensation for delays and cancellations as well, based on air passenger rights regulations EU261 and UK261.
Travel insurance is what you purchase prior to travel. It protects your trip from any unforeseen events that would significantly disrupt your plans. There’s a bit more to it than this so let’s look more closely.
Airline Compensation
In the United States, passengers can be compensated as much as $2,150 for denied boarding incidents caused by overbooking. Aside from that, carriers are not obligated to provide financial payouts or meals or hotel accommodation that can result from flight delays and cancellations.
But if the airline mishandles your luggage, then you can get $4,700 per passenger on domestic flights and roughly $2,080 for international ones, based on the rules of the Montreal Convention.
Travel Insurance
Travel insurance coverage varies quite a bit, depending on the insurance company, your specific policy, and the situation. Generally speaking, it will cover what the airline will not if you’re bumped from a flight or your luggage is lost or damaged. It will also reimburse you for lost, prepaid expenses if you have to cancel all or part of your trip because of illness or other sudden events.
Who Should Pay: Airlines or Travel Insurance?
So, where should you file a claim if your flight is disrupted? Well, the answer depends largely on where you are traveling.
When to Submit an Airline Compensation Claim
If you are traveling in the United States, and your flight is canceled or delayed, causing your travel plans to be upended, then you should first look to your travel insurance company for coverage. Again, the only exceptions to this are denied boarding because of overbooking and baggage loss or damage.
If you are traveling in a country with strong air passenger rights regulations, like the EU, UK, or Canada, you should first first look to the airline to provide compensation. Passengers in these regions can get compensation in addition to a rebooking or a refund for disrupted flights, but a cash payout will only happen if the airline is at fault.
File a compensation claim with the airline if. . .
- Your flight was canceled with less than 2 weeks notice and the airline is to blame.
- You arrive 3+ hours late at your destination for an avoidable reason like staffing issues
- You’re denied boarding your flight because it was overbooked.
- The airline damaged, lost, or delayed your checked luggage.
Example Scenario #1: Can you file a travel insurance claim for an extensive flight delay in the US?
If you’re flying in the United States, and your flight is severely delayed for 3 hours. In this case, the airline does not have to compensate you for the inconvenience or help you with meals or hotel lodging. So, if you’re stranded at the airport, you’ll probably have to purchase these essentials on your own.
Because of this, you could file a claim with your insurance provider for reimbursement, provided you have the proper coverage in your policy.
If you’re unsure whether or not you qualify for airline compensation, just enter some basic flight details into our compensation calculator to see if you’re eligible.Check Your Flight
Example Scenario #2: Can you file a travel insurance claim for a canceled international flight?
Let’s say you have a British Airways flight from New York to London that’s canceled 4 hours before boarding because of a staffing shortage. The cancellation means you miss a day of your vacation, including a pre-paid hotel stay.
In this situation, the airline would compensate you for the inconvenience after you file a claim with BA. The missed hotel stay, if not refundable, would be something you would claim with your travel insurance.
When to Submit a Travel Insurance Claim
Think of travel insurance as a back-up plan. It will cover the expenses when you need to cancel your plans or when the airline will not compensate you.
File a travel insurance claim if . . .
- You had a sudden personal or family emergency, and you need to cancel your flight.
- Your flight was canceled or delayed, and you miss part of your trip because of it.
- Your baggage was lost, damaged, or stolen, and the airline was not involved. For example, if it was stolen from your hotel.
Expert Tip: Always check if your credit card includes travel insurance. Many premium cards offer coverage for cancellations, lost luggage, and even delays, often at no extra cost. - Anton Radchenko, International Lawyer at AirAdvisor.
Quick Guide: Who Pays for What
Situation | Was the Airline at Fault? | Airline Compensation | Travel Insurance |
You’re denied boarding because the flight was overbooked |
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Your flight to the EU or UK was canceled, and you were flying with an airline from those regions. |
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You canceled your flight because of illness. |
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Your suitcases are damaged or lost after a flight. |
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(Travel insurance will sometimes pay for anything the airline will not cover) |
Your luggage is lost at your hotel. |
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Yes
Not necessaryCan You Claim with Travel Insurance and the Airline?
There are some situations where airline compensation and travel insurance do work together, allowing you to successfully file claims with both. You just have to avoid making claims for the same issue with both the airline and your insurance. In other words, you can’t double dip, but you can get coverage from both parties for different aspects of your loss.
Example scenario: Baggage Mishandling
Let’s say you had a flight from Dallas to Boston, and your checked baggage didn’t arrive. You file a report, and after several days, the airline tells you your luggage is permanently lost.
In this case, you could file a reimbursement claim with the airline for the lost items as well as for any clothing and toiletries you had to purchase because your bags were missing. However, the maximum amount you can get from the airline is $4,700, which might not be enough to cover the cost.
This is where travel insurance can help, especially if you have the right kind of coverage. If you are protected against baggage loss, then you can submit an insurance claim for the remaining difference.
To Sum Up
If you know where to submit your claim, you can get your money back more quickly with a lot less hassle. Just remember that, for flight disruptions and baggage mishandling, you should always claim with the airline first. If they reject your claim or if you need coverage for non-flight related parts of your trip, then you would seek reimbursement from your travel insurance company.
Of course, every situation is unique, so check your flight details below to see if you’re eligible for airline compensation. If you’re not, you can save some time and file directly with your insurance provider.
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