Jun 27

Why you still need travel insurance, even with the new refund rules

June 27, 2024
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Why you still need travel insurance, even with the new refund rules

As exciting as traveling can be, it can also come with unexpected challenges. That's why you should have travel insurance that can protect you from unforeseen events and expenses.

But you may be wondering, do you still need travel insurance now that the U.S. Department of Transportation (DOT) has issued a new rule that requires airlines to provide refunds for canceled or significantly changed flights?

The answer is yes.

According to the DOT's new rule, airlines must now provide prompt, automatic refunds to passengers whenever:

  • A flight is canceled, and the passenger is not offered or rejects alternative transportation or travel credits, vouchers, or other compensation.
  • Significant changes to a flight occur, including departure or arrival time shifts by more than three hours for domestic flights and six hours for international flights; departures or arrivals from a different airport; the flight has more layovers than the original itinerary; or any change that affects the accessibility needs of a passenger with a disability.
  • A passenger pays for an extra service, like checked baggage, seat selection, or Wi-Fi, that is not provided by the airline.
  • A passenger who files a mishandled baggage report sees significant delays in baggage return. The individual is entitled to a refund of their checked bag fee if it is not delivered within 12 hours of their domestic flight arriving at the gate, or roughly 15 to 30 hours of their international flight arriving at the gate.

Additionally, the rule says that refunds from airlines must be the full amount, including government taxes and extra airline fees. The payment should also be in cash or the original form of payment, unless the passenger chooses to be compensated with vouchers, travel credits or another form of compensation. This applies to all scheduled flights to, from, or within the United States, regardless of the size of the aircraft or the location of the airline or the passenger.

Travel insurance is still essential

While the new refund rule is a step in the right direction for consumers, it does not cover all the possible scenarios and costs that travelers may face.

Travel insurance offers additional protections that go beyond the refund rule, such as coverage for:

  • Trip cancellations or changes due to natural disasters, hijacking, accidents en route, sickness or injury of the passenger or a family member, or other causes outside of the passenger’s control.
  • Medical expenses, repatriation, and evacuation if the passenger becomes ill or injured during the trip, especially in foreign countries.
  • Personal belongings that become lost, stolen, or damaged during the trip.
  • Travel delay expenses due to airline flight overbooking, strike, adverse weather, hijacking, quarantine, mechanical breakdown, or other causes.
  • Legal advice, interpreters, emergency cash, lost documents, and other assistance services during the trip.
  • Repatriation of remains in case of death during the trip.

Travel insurance can also provide travel credits or vouchers that are transferrable and valid for at least five years if the passenger cannot travel due to a serious disease, such as COVID-19.

Before you book your next flight, make sure you compare and choose a travel insurance plan that suits your needs and budget. You can find more information about travel insurance options and benefits at Travel Insurance - Protect yourself | Popular Insurance.

The information and overviews found in this article are designed to help you understand some of the factors you should generally consider. Any description included is for informational, educational purposes only and for your independent consideration; It should not be considered, or viewed, as advice or as a recommendation to carry out (or refrain from carrying out) any particular action. By providing this information, we assume that you are able to evaluate this information and the general descriptions found here to exercise your independent judgment. Banco Popular de Puerto Rico, its subsidiaries and/or affiliates, are not dedicated to providing legal, accounting or tax advisory services. If legal, accounting, or tax advisory services are required, you should seek the services of a competent professional.
 
Insurance products and services are offered by Popular Insurance, LLC, a subsidiary of Popular, Inc. and an affiliate of Banco Popular de Puerto Rico. Assurant, Inc. and Popular Insurance, LLC, Popular, Inc. or Banco Popular de Puerto Rico are not affiliated. Popular Insurance, LLC is a General Agency and Authorized Representative duly authorized by the Office of the Commissioner of Insurance of Puerto Rico to manage life insurance business, variable life insurance, variable annuities, disability, property and contingency, title, and health services in Puerto Rico. Insurance products are not insured by the FDIC or other federal government agencies, are not deposits or obligations and are not guaranteed by Banco Popular de Puerto Rico, its subsidiaries and/or affiliates. Popular, Inc. and Banco Popular de Puerto Rico do not offer, subscribe or issue insurance products.