Don't Let Bankrupt Airlines Threaten Your Vacation Plans

Another airline died this week, ATA Airlines Inc, grounding its fleet and stranding thousands of passengers. ATA died shortly after the death of Aloha Airlines was announced just days earlier.

With high fuel costs are a leading factor for such defaults, more dead airlines probably can be expected in the future.

The best way to protect yourself is with travel insurance but not all insurance policies are created equal. Check out and compare the policies of more than a dozen companies at insuremytrip.com

How to best protect yourself from bankrupt airlines:

1. Always use a credit card to pay for your trip.  When there’s a default you can dispute the charge and have your credit card company remove it from your billing.
2. But if you’re already traveling at the time of the airline’s bankruptcy, you might be able to fly other airlines though perhaps on a standby basis. In any case, you’ll probably encounter delays and expenses that many travel insurance policies normally cover.

3. Buy travel insurance from an independent source, not the travel provider. Travel Insurance policies offered by tour operators, cruise lines, or airlines either don’t cover their own financial default. They may also exclude the financial default of the company from whom you purchase your coverage.

4. Check the insurance plan to see if they have a list of airlines or travel companies that they either will or will not cover. One company, Access America, provides a list of companies they will cover while two other companies, Travel Guard and Travelex, provide a list of companies they will not cover.

5. Buy your travel insurance soon after making a trip deposit. Default protection is only available if you purchase your travel insurance within 10 to 21 days of your initial deposit. The time period varies with each company and plan so our advice is to do it within 10 days to ensure that you have the maximum flexibility.

6. Review the coverage carefully. Another reason to buy coverage early is some plans have a “waiting period” after the coverage is purchased and before the default coverage goes into effect. In some cases this is 14 days after you buy the insurance.

7. Buy your trip or airline ticket through a travel agent. Some insurance plans exclude coverage if you have purchase your trip directly with the travel company. Most do not. However, for maximum flexibility especially for a very expensive trip, purchase your trip through a travel agent, whether locally or online, rather than buying direct.

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