Travel Insurance compensation in case of a delay or cancellation? Sense or non-sense?
Whether it’s buying the best airline ticket or finding the best travel insurance, people want an easy way to understand and compare products online. But, when it comes to submitting a (flight delay compensation) claim, people will find it difficult, time-consuming and complicated. Would a legally eligible claim need to be covered under a travel insurance policy or would a traveller seek to file a complaint to the airline carrier him-/herself? Would there be a strong support for travellers, who are eligibly entitled to compensation, with customer-friendly travel insurance benefits?
Under EC 261/2004 passengers of airline carriers are entitled to fixed amounts of compensation in case of delays, missed connections, cancelled flights or overbooking.
The delay at the location of arrival should be at least 3 hrs. in order to be eligible for compensation. The compensations are applicable, according to the length of the journey, as follows:
- EUR 250, for distance up to 1500 km
- EUR 400, from 1500 – 3500 km
- EUR 600, above 3500 km
The EC 261 Directive is applicable to all EU registered airline carriers and for non-EU carriers departing from an EU territory airport. After 5 hrs. of delay, the passenger is also entitled to compensation for F&B, transport and hotel accommodation.
The airline carriers have limited extraordinary circumstances to be excluded of paying compensation in case of: severe weather conditions, strikes, bird strike while safety measures (technical errors are not qualified as extraordinary circumstances), or crew shortage are in the fullest responsibility of the carrier.
Why should this compensation be part of a travel insurance benefit? Travel Insurance are protecting travellers against unforeseen circumstances related to their travels. Stolen or lost luggage, medical cost & evacuation can be the risks a traveller wants to externalize. What if a traveller has a delay and misses a connecting flight to his holiday destination and can only continue his journey the next day or the day after? Should this unforeseen circumstances be covered under his travel policy or cancellation policy? In case his/her luggage is stolen or lost after checking in, the insurance carrier will seek reimbursement from the airport/airline responsible. The same applies for the medical cost in case there is a third liable party who has caused the incident/accident.
In case of an eligible claim for compensation under EC 261 this could be the same. The insurance carrier will pay out the compensation amount to the insured person/party and will seek reimbursement against the airline carrier, with support of the EU Directive.
The airline carriers are getting nervous about the increased amount of complaints they are receiving after delays/cancellations and are ‘protecting’ themselves against the tsunami of claims from passengers or specialized TPAs like FlightClaimEU.
Ryanair have changed their T&C recently that a complaint/claim has to be submitted by the passenger only in Ireland. Wizz Air is offering saving points or a free ticket in case of an eligible claim. EasyJet has added a cancellation/delay fee to their ticket prize in order to pay out any eligible compensation. The US insurance carrier Chubb recently teamed up with Wizz Air offering an ‘all-inclusive’ travel insurance, with compensation in case of an eligible claim, according to EC 261.
This development would create a significant business opportunity for travel insurers. Adding this benefit to their policy will add extra premium income, whereby the traveler receives compensation in case of an eligible claim and the insurer has the right to seek reimbursement against the airline carrier involved.
FlightClaimEU provides a seamless, intuitive experience for submitting a compensation claim by customers online (24/7). Whether it’s an EU-wide airplane carrier or a local one, people searching for online flight claims applications on their phone or computer can experience a ‘Fast-Easy-Simple’ way — all in as little as 5 minutes. And when customers have registered once, they can immediately submit their next flight claim and select the appropriate airline carrier. They can add additional information or documents online or over the phone through one of the claims attendants. Nowhere is customer engagement more important than in the (flight) claims area. So what do claimants want? Here claims registration represent the moment of truth, because the speed of the airline carrier’s response is critical to satisfy the desire customers have to obtain instant information on a variety of channels. The ability to provide this new level of flight claims performance impacts the value being created to customers from all demographics. “Customers expect to be able to register their flight claim instantly without navigating a phone tree,” says Cees WERFF, President & CEO of CCN. “They expect to be able to send in a photo of their ticket and boarding pass to the airline carrier immediately after their initial registration.”