With the U.S. Department of Transportation (DOT) recently strengthening airline refund rules to protect travellers from abrupt flight delays and cancellations, it’s clear that consumer rights are receiving more robust support. However, while these new guidelines enhance airline accountability, they only address a few risks that travellers encounter. Comprehensive travel insurance remains indispensable, bridging the coverage gaps that DOT rules do not reach.

Why DOT Refund Rules Don’t Cover Everything

Under the DOT’s updated policy, airlines must compensate passengers for delays, cancellations, or major scheduling changes. This improvement increases transparency and adds layers of accountability. Yet, the DOT’s rules focus exclusively on flight-related issues, leaving significant areas of vulnerability unaddressed. Travel insurance experts like InsureMyTrip emphasize that travellers face various risks beyond airline disruptions. Here’s why adding travel insurance is critical for a fully protected journey:

1. Non-Airfare Expenses Are Still at Risk

While the DOT refund rules cover airfare, they don’t safeguard non-refundable expenses, which can account for 60-80% of total trip costs. This includes prepaid hotel stays, local transportation, and pre-booked tours, which travel insurance can protect. In cases where flights are delayed or cancelled, these costs often remain non-recoverable without insurance coverage.

2. Medical Emergencies Abroad

The DOT’s rules are limited to airline responsibilities and don’t cover unexpected medical expenses overseas. U.S. health insurance policies generally do not extend to international emergencies, exposing travellers to costly medical bills and evacuations. Travel insurance with medical coverage provides essential support, handling unexpected healthcare needs and evacuation costs.

3. Comprehensive Baggage Protection

Although airlines offer some reimbursement for lost or damaged baggage, limits on this coverage often fall short. Travel insurance typically includes higher compensation limits, covering the cost of lost, delayed, or stolen luggage with fewer restrictions. This extra coverage becomes crucial, especially for travellers with high-value items or essential travel documents in their baggage.

4. Protection Against Trip Interruptions and Cancellations

Unforeseen natural disasters, family emergencies, or serious illnesses can lead to interrupted or cancelled trips. DOT rules offer no recourse in these cases, while travel insurance steps in to help recover lost investments. Insurance policies can cover a portion or even the total cost of prepaid expenses, providing a buffer against life’s unpredictable disruptions.

5. Cancel for Any Reason (CFAR) Coverage

One of the most valuable insurance options is Cancel for Any Reason (CFAR) coverage, which partially refunds trips cancelled due to any cause not typically covered by standard policies. This benefit, not offered by airlines, gives travellers unmatched flexibility and peace of mind, even allowing them to cancel plans at the last minute without forfeiting their investment entirely.

The Bottom Line

The DOT’s enhanced airline refund policies represent positive change for travellers, but they leave significant gaps that could lead to substantial financial losses. Comprehensive travel insurance remains an essential safety net for those looking to travel with proper security, covering everything from medical emergencies to lost baggage and non-refundable expenses. In an uncertain world, this added layer of protection ensures peace of mind and financial protection where airline regulations fall short.

Written by: Jill Walsh

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