The U.S. Department of Transportation (DOT) announced in April 2024 a significant change to regulations when it comes to airlines and refunds for canceled or delayed flights.
This new rule, which will apply to all airlines operating flights to, from, or within the United States, will add a new layer of protection for travelers.
What Is the New DOT Airline Refund Rule?
The new rule will require all airlines to give automatic refunds whenever there is a flight cancellation or major delay or shift of a flight.
This means that if your flight is unexpectedly canceled or delayed for a certain amount of time, an airline would be required to issue an automatic refund to passengers.
This new DOT airline rule would require a refund be issued by the airline in the event of any of the following:
- A flight cancellation
- Flight delayed over 3 hours when traveling domestically within the U.S.
- Flight delayed over 6 hours for international travel
- A significant change in a flight, such as departure or arrival in a different airport, a change in airplane causing a downgrade of service, or unexpected additional flight connections
- Missing checked luggage for over 12 hours for a domestic flight or 15-30 hours for international flights
- Services you paid for and didn’t receive, such as wifi, seat selection, or in-flight entertainment
- The addition of connections at different airports or flights on different planes that are less accessible for a person with a disability
Additionally, airlines are required to notify passengers promptly of any changes to their flight.
How Will Refunds Work Under the New Airline Rule?
A key component of the DOT airline rule is that refunds must be an easy and straightforward process.
The rule states that refunds must be:
- Issued within 7 business days for credit cards or 20 days for other payment methods
- Issued in cash or original form of payment
- The full amount of the ticket purchase price, minus any cost of transportation used, including all taxes and fees
When Will This New Rule Take Effect?
The new airline regulations are set to take effect within six months from the month of the announcement, so likely around October of 2024.
However, there is the possibility that the rule is challenged by Congress before the time in which this rule is due to take effect.
How This New Rule Helps U.S. Travelers
This new airline regulation will significantly help protect travelers from the uncertainties of traveling in today’s world, where flight cancellations and delays are more common than ever.
The DOT’s final rule also requires airlines to make the refund process simple and straightforward, which prevents passengers from having to jump through hoops to try and request a refund for a flight hiccup.
This new regulation will give passengers peace of mind that their funds are protected if their flight is interrupted in some way and gives reassurance that since airlines can no longer take advantage of their customers, more individuals will be more willing to travel.
How Does This Rule Affect Travel Insurance?
With this new rule, travelers may wonder whether or not travel insurance is still important to purchase for their trip.
While this new rule certainly protects passengers and their flight expenses, travel insurance offers significantly more protection than just flight delay coverage.
Travel insurance offers coverage for:
- Your nonrefundable trip expenses, including flight, accommodations, and tours, if you have to cancel or end your trip early for a covered reason, such as the death of a loved one
- The prepaid cost of missed accommodations or event tickets if a delayed or canceled flight causes you to miss your reservations
- Medical emergencies related to unexpected illnesses or injuries that occur during your travels
- Canceling your trip plans for any reason and receiving a portion of your prepaid expenses back (with CFAR add-on coverage)
- Rental car damage and theft
- Accidental death and dismemberment
- Lost or stolen baggage or important travel documents, like passports or visas
Travel insurance covers way beyond just flight ticket costs if your flight is canceled by an airline. It can cover flight ticket costs if you have to cancel or interrupt your trip personally for a covered reason, along with other prepaid and nonrefundable trip expenses such as:
- Flight costs
- Prearranged transportation
- Hotel or stay accommodations
- Event tickets
- Tours
- Cruise costs
For example, if you have to cancel your trip for a specific covered reason, such as loss of your key travel documents or the death of a family member, travel insurance can cover any of the prepaid, nonrefundable costs listed above associated with your trip.
Additionally, the invaluable coverage for accidents and illnesses during your travels can not be overlooked when it comes to travel insurance, especially when traveling abroad. Having assistance when trying to find medical care and coverage for your eligible medical expenses can be a lifesaver.
Travel Insurance Provides Complete Protection
While the DOT rule helps to protect flight passengers against changes and cancellations by airlines that they cannot control, travel insurance offers complete travel protection, well beyond just coverage for flight tickets.
Travel insurance will protect all of your prepaid and nonrefundable trip expenses and provide a safeguard if you get sick or injured unexpectedly.
Still have questions? Contact our Customer Success Team for assistance or read more about the importance of trip insurance.
