Will your travel insurance cover the flight chaos in the US? – Money sense

Hundreds of thousands of Canadians fly to and from the US every month. Those who purchased cancellation insurance before the government shutdown was announced as a travel advisory should be eligible for compensation, said Marty Firestone, president of Toronto-based insurance company Travel Secure Inc.

That means travelers who recently purchased a policy or postponed it altogether may have no luck with coverage for meals, hotels, and transportation, although the airline would still owe them a rebooking or a refund for the canceled trip.

Recommended travel credit cards

“The key here for this particular situation is that insurance was purchased before the advisory came into effect because it is now considered a ‘known event,’” says Matt Hands, vice president of insurance at Ratehub. In the insurance world, a known event is a foreseeable event, which is therefore excluded from coverage.

Some credit cards offer travel insurance with coverage for flight cancellation or interruption. But consumers should still review their terms and conditions to confirm what is covered, Hands said. For example, the insurance only applies if the trip has been booked with that card.

Shortage of US flight controllers leads to cancellations in Canada

The shortage of U.S. flight controllers due to the federal shutdown prompted U.S. regulators to order air traffic restrictions starting last Friday. Since then, winter weather in parts of the continent has exacerbated staffing problems.

Several Canadian airlines told The Canadian Press last week that passengers could be affected, especially those with connecting flights in the United States. Even direct cross-border routes between major hubs are affected. Air Canada informed passengers who booked a flight from New York City to Toronto on Monday that the evening trip “was canceled due to air traffic control restrictions.”

“Air traffic control restrictions may occur if too many aircraft share the same airspace,” read the email sent to customers and obtained by The Canadian Press.

FAA warns that flight delays may continue

The average cancellation rate in recent days has already exceeded the U.S. Federal Aviation Administration’s requirement of 4% — a figure expected to rise to 6% Tuesday and 10% next Friday — according to Cirium.

The FAA warned Monday that staff at more than a dozen towers and control centers could delay planes departing for destinations including Phoenix, San Diego, the New York region and Houston. The agency also expanded its flight restrictions on Monday, blocking business jets and many private flights from using a dozen airports already under commercial flight limits.

The U.S. Senate on Monday passed legislation to reopen the government, but the bill still must clear the lower house of the legislature and final passage could still take several days — with further flight disruptions possible through the rest of the month.

“It will last a week to 10 days, if not two weeks, leading into the Thanksgiving season when it is the busiest travel day,” Firestone said. “This affects so many people, including Canadians traveling for business who can’t risk being stuck in New York for two or three days because of this shutdown. It’s a domino effect.”

U.S. Transportation Secretary Sean Duffy made it clear last week that the cuts will continue until the FAA sees staffing levels at its air traffic control facilities stabilize.

Read more about travel insurance: