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Trip Insurance and Flight Cancellation Future Flight Credits

I haven't seen this issue raised in the various Travel Insurance threads:

Given you have travel insurance and you are not able to take the trip for a covered reason, or have Cancel For Any Reason (CFAR) coverage. Many airlines are offering free changes and Future Flight Credits (FFCs) if you have to cancel. So if you cancel your trip and flights, and the airline offers FFCs, how does that play with your travel insurance? United's FFCs, for example, are only valid for travel 12 months from the original booking date.

Posted by
386 posts

We have recently had to cancel an upcoming trip for a reason that is covered under the policy, and I have filed a claim to be reimbursed for some modest pre-paid, non-refundable expenses, namely, one hotel fee and one Easy Jet flight for which there is no refund or future flight credit. I didn't have to include our Delta international airfare in my claim because we booked the tickets using Skymiles, and when I notified Delta we were canceling the flights, there was full restoration of our Skymiles and full refund of the taxes and fees we had paid.

When the claim form was emailed to me by the insurance company, there were a lot of instructions in the email, and this comment was included under the heading "Please Note:"

"If applicable to your claim, the Trip Cancellation and Cancel For any Reason benefits provide coverage for unused, prepaid and non-refundable Travel Arrangements (75% in the case of Cancel For Any Reason, subject to policy criteria). If the travel supplier has agreed to issue a credit towards your booking, this has essentially been refunded, so no loss has occurred for us to consider under this policy. In view of this, we are unable to consider any aspect of your booking, which is subject to credit unless we received evidence that this has expired or that the travel company confirms in writing that this has been forfeited and is no longer available for us."

It thus appears that had we paid for the Delta tickets with cash rather than Skymiles, I would not have been able to make a claim to be reimbursed for the cost of the tickets, unless I could somehow forfeit Delta's generous future flight credit and convince the airline to send me something in writing confirming the forfeiture and unavailability of any credit.

It makes sense to me that you don't get to double dip . . . collect reimbursement from the ins. co. and still have a travel credit to use from the airline.

I wonder if a traveler could file a claim now for everything other than the airfare, and then in the future, if he/she was never able to use the credit and it expired, file another one to be reimbursed for the airfare. It seems like companies have deadlines within which a claim has to be filed, and this would be an easy claim to deny, but I don't know that for sure.

With regular insurance, the company I tend to use lets me make the decision to self-insure some costs, and because I'm satisfied with future flight credits, I don't insure my airline tickets. But when we purchase a policy with a cancel-for-any-reason upgrade, we are required to insure all prepaid costs that are non-refundable, and they consider airfare to be non-refundable even if there are future flight credits. Now, that feels like an insurance company trying to have its cake and eat it too. We have to insure the cost of the airline tickets, but if there's a claim, the existence of a credit will result in a denial? I've complained about this to my agent, but he has told me we don't dare self insure airline tickets when we have CFAR insurance, as doing so will void out that upgrade, and it will just be regular insurance permitting reimbursement if cancellation is for a covered reason.

Posted by
93 posts

My husband and I recently canceled a trip for a covered medical reason. We had purchased 2 non refundable airline tickets. We canceled the flights and received credit for future flights.

When discussing my claim with my travel insurance claims department, I was told they would provide a cash refund for the airline tickets if I provide airline receipt of purchase, airline notification that I received credits for future travel, and a signed waiver that we will NOT use the airline credits for future travel (and if we do ever use the credits, we will reimburse the insurance company for the refunded amount.)

I filed the claim a few days ago, so we’ll see how this goes. They said they would forward the waiver after the claim documentation is reviewed.

I think how this type of situation is covered likely varies depending on the insurance company and its policy. When reviewing policies, I have found it is frequently difficult to get specific answers from customer service on specific events and scenarios. Read the fine print prior to purchase to see if something like this is addressed.

I am hoping I was given accurate information by the claims department and that I will be reimbursed for the airline tickets.

Posted by
21709 posts

Simple way to think about it. You get paid for actually, out of pocket, cash lost. You cannot get both an insurance claim for tickets and ticket credits from the airlines. That is called "enrichment" and is directly prohibited in most insurance policies. Generally you should try to insure un-refundable deposits. That is your true lost.

Posted by
218 posts

@Frank: No I'm not trying to double-dip. My issue relates to having to cancel, getting a FFC which the insurance company won't consider a loss, but then not being able to use the FFC and left high and dry. Looks like some policies let you recover after the FFC expires, others do not.