Travel insurance: will they get you home if your airline goes bankrupt?

IF it is included in the fine print. First, read the exclusions. Generally if something is not specifically excluded, it is generally included. Bankruptcies are often excluded. So read the fine print carefully. And with most travel insurance policies you are insuring out-of-pocket lost. So if you had $500 ticket the most you would get back is the $500. The insurance would not pay for a new ticket home. Now there could be premium policy out there who would do that but they would also clearly state that in your policy and the premium would be much higher.

Most travel insurance applications have a drop-down box where you input the name of your airline. If your airline isn't listed, I would not buy without making a phone call to the insurance company. There is usually a paragraph with the word Bankruptcy in the heading. Usually it refers to tour providers, but you have to read the actual text. (Some travel writers recommend not buying the cruise or tour company's house insurance, because it might not survive the bankruptcy of that company.)

It's a special case, but if you were to use the cruise or tour provider to purchase your air, you can't assume that third-party insurance will automatically cover it. For example, we once bought a China river cruise that came with $199 air. I had to assume that the (reputable) river cruise company would make sure we got to the trip if THEY provided our air. (Yes, we had three segments and the flights took 24 hours from Newark, NJ!)

Here are some examples from a company I often use, Travelex:

[under Benefits ... ]]
Transportation and Accommodation
(a) Financial Default of an airline, Cruise line, Common Carrier or tour
operator provided that:
(1) The insurance was purchased with 21 days of Initial Trip Payment; and
(2) Financial Default occurs more than 14 days following an Insured's effective date for the Trip Cancellation or Trip Interruption Benefits.

“Financial Default” means the total cessation or partial suspension of operations due to insolvency, with or without the filing of a bankruptcy petition by a tour operator, Cruise line, or airline.

Extra Coverage
(when the insurance plan is purchased within 21 days of Initial Trip Payment)
• Pre-Existing Condition Exclusion Waiver
• Trip Cancellation / Interruption due to Financial Default

But you can't assume anything from these quotes. You have to READ the policy you are considering.

Lots of WOW customers must be checking this today...

My experience in shopping for travel insurance is that all the policies I’ve looked at cover bankruptcy of a carrier, tour company, etc. But, I have seen lists of carriers and tour companies that are specifically excluded. Insurance companies are proactive. If they see a company on the skids they won’t underwrite that.

Travel insurance companies offer many different level of policies so this is hard to answer. Read the fine print and call them as well.

Travel insurance: will they get you home if your airline goes
bankrupt? And what is the term I should look for to see if the policy
has this feature. Thanks

There is no blanket answer. You have to read the specifics of what is covered in the specific policy you want. Next, if you're looking for a policy, seek references who tell you that this company PAYS on claims, not rejects them. Buying insurance without knowledge that the insurance company will honor claims is not buying you peace of mind which is exactly what insurance is supposed to be.

Generally if you buy after the information about them having issues becomes public, you will not be covered. It’ll be excluded. But you need to read your policies. I have never bothered to See if a policy covers this because I generally only book with major carriers and I figured the chances are good they’ll still be in business when I fly.

Even if you have travel insurance that includes coverage, I would be surprised if they paid a claim before it was processed through the bankruptcy court. That can take a long time.

Example of AIG Gold coverage from InsureMyTrip link:
https://www.insuremytrip.com/travel-insurance-providers/aig-travel/gold-deluxe-trip-cancellation/#tab_plan-summary

Default of Travel Supplier Coverage:

You have default of travel supplier coverage as outlined here and
subject to all Policy terms, conditions, limitations and exclusions.
If Your travel supplier files for bankruptcy or completely ceases
operation more than 14 days after Your Policy purchase date and the
loss incurred is not recoverable from any other source, either as a
reimbursement or equivalent compensation, and the travel supplier is
not listed on Our Travel Guard Alert List (see Our website
www.TravelGuard.ca or call 1-866-878-0191) prior to Your Policy
purchase date then You are covered up to Your Insured limits for Trip
Cancellation, Trip Interruption, and Trip Delay. Our Maximum Limits of
liability are $7,500 per Insured; $2,000,000 per the default of any
one (1) travel supplier including its related companies; and
$5,000,000 per the default of all travel suppliers in a calendar year.
If loss for all insureds exceeds the Maximum Limits listed above, We
will pay each Insured that portion of the benefit stated which the
maximum limits bear to the total loss of all persons under all Travel
Guard Canada Policies.