Does Travel Insurance Cover Bankruptcy?

by Steve Dasseos on November 24, 2007

My family of four is planning a trip to Italy in June 2008. If I purchase your trip cancellation insurance, does it cover bankruptcy of the airline I have booked flights on?

The answer is technically “No”. Bankruptcy is commonly misunderstood to be the same as Financial Default. That’s because may travel insurance sellers use the terms interchangeably.

Just going into bankruptcy by the airline or travel supplier isn’t covered. On the other hand, all our plans can cover Financial Default. Financial Default means the travel supplier must cease operations compared to bankruptcy which means the company’s seeking legal protection to hopefully work out its financial problems.

Go here for more information: What’s Supplier Financial Default?.

I hope this makes sense. If you want the right travel insurance advice, call us at 1-888-407-3854 and we'll help you figure it all out.

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