Does Travel Insurance Cover Airline Going Out of Business?

By Anna Duncan

Travel insurance policies usually provide coverage for airline tickets purchased in the event of a carrier going out of business, but the amount of coverage they provide and what they cover might vary based on the policy.

The first thing to consider when looking into travel insurance is what type of policy you are looking for. If you are simply looking for a basic policy that covers flight cancellations due to carrier bankruptcy, then you will want to look for a trip cancellation policy. This type of insurance will provide reimbursement for flights that are cancelled due to an airline going out of business.

If you are looking for more comprehensive coverage, there are other types of policies that may be more suitable. For instance, a comprehensive travel insurance policy may provide coverage in the event that an airline goes bankrupt or is liquidated. This type of policy will typically cover losses resulting from flight cancellations due to airline insolvency, as well as any costs associated with rescheduling flights and rebooking accommodation.

It is important to note that some travel insurance policies may not provide coverage if an airline goes out of business due to mismanagement or other reasons unrelated to bankruptcy. Additionally, if your flight was booked through a third party website such as Expedia or Orbitz, the travel insurance may not cover any losses associated with the airline’s bankruptcy.


Overall, travel insurance does typically provide some form of coverage in the event that an airline goes out of business. However, it is important to review your policy carefully and understand what types of losses it covers before purchasing it so that you can make an informed decision about whether it is right for your needs.