Scheduled Airline Failure Insurance

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davistev

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I am concerned about the possible end of Jet Airways and therefore started to look at my travel insurance policy from Southern Cross. It explicitly states that failure of airline to provide service due to financial halt of airline is not covered.

Can someone tell me what company in Australia specifically covers "Scheduled Airline Failure Insurance" (SAFI)?

I would hate to be stranded in India.
 
Even individual flight cancellations can sometimes only be covered by travel insurers if one specifically opts in and pays an additional premium.

From the policies I've had a quick gander at, none appear to specifically mention airlines going into administration. Sadly, you may be on your own.

Jet Airways seems to be in a perilous financial situation.

There have also been articles suggesting that the Malaysian Government is considering terminating Malaysia Airlines, a huge lossmaker, but no decision has been reached.

Southern Cross is based in NZ and receives very good reviews, so if it's excluding what you seek cover for, it's to be expected most others would also.

I'd avoid booking on either (a suggestion that isn't very helpful to you).
 
I will continue to look at each PDS from insurance companies bit by bit and list here what I find. I am only looking at multi-trip travel insurance coverage. I am not in anyway endorsing any company here, just listing what I find to assist others who may wish to be covered. I was actually very surprised to see that the company I have been with does not cover such an event - hence this posting.

Coverage:
Southern Cross (No Coverage)
1Travel Insurance (No Coverage)
Insureandgo ($1,000 coverage in event of airline collapse and you are stranded)
 
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This is an extract from the current “Free” Credit Card policy provided by CBA. It appears to respond to your concerns, but I’m not a lawyer...

Benefit 6: Travel Service Provider Insolvency
[Definition: Travel services provider means a scheduled services airline,
hotel, accommodation provider, car rental agency, coach, bus, shipping line or railway.]

If, due to the insolvency of a travel services provider:
1. you have to rearrange your journey, we will pay the
reasonable cost of doing so. (We will not pay more for the
cost of rearranging your journey than the non-refundable
costs, which would have been incurred had the journey
been cancelled. The cover is limited to the same or similar
standard of transport and accommodation as was originally
booked.)
2. you have to cancel your journey (where you cannot
rearrange it prior to leaving home) we will pay you:
a. the value of the unused portion of your prepaid travel
or accommodation arrangements that are non-
refundable and not recoverable in any other way
b. your travel agent’s cancellation fees, equal to the lesser
of $500 or 15% of the value of the travel arranged by
the travel agent. We will only pay these fees if, at the
time the circumstances causing your claim happened,
you had already paid at least the full deposit, and
c. the value of frequent flyer or similar flight reward
points, air miles, redeemable vouchers or similar
schemes lost by you following cancellation of the
services paid for with those points if you cannot recover
your loss in any other way. The amount we will pay is
calculated as follows:
i. For frequent flyer or similar flight reward points,
loyalty card points, air miles:
- The cost of an equivalent booking, based on the
same advance booking period as your original
booking. We will deduct any payment you made
towards the booking and multiply it by the total
number of points or air miles lost, divided by the
total number of points or air miles used to make
the booking
ii. For vouchers, the face value of the voucher or
current market value of an equivalent booking,
whichever is the lesser, or
3. you have to incur additional expenses in returning home,
we will pay your reasonable additional accommodation
(room rate only) and additional transport expenses, at the
same fare class and accommodation standard as originally
booked.
You must recover the maximum amount available from any
statutory fund, compensation scheme or any other source.
For example, if you paid for your airline ticket with a credit
card and the transaction meets the card issuer’s terms and
conditions regarding non-provision of services, you need to
claim the cost of the airline ticket through the credit card
issuer first.

The maximum benefit limit for this section is:
Gold, Platinum & Diamond
cardholder only $5,000
cardholder with family $12,000

We will not pay for claims caused by:
1. the insolvency of a travel services provider if the booking
was not made before the start of your journey while you
are still in Australia
2. the insolvency of any travel agent, tour wholesaler, tour
operator or booking agent
3. insolvency of a travel services provider if, at the time of
activation, the travel services provider was insolvent or a
reasonable person would have reason to expect the travel
services provider might become insolvent
4. accommodation expenses incurred after the date you
originally planned to return to Australia, or
5. an act of terrorism (or arising directly or indirectly from it)
or the threat, or perceived threat, of an act of terrorism.
 
Even individual flight cancellations can sometimes only be covered by travel insurers if one specifically opts in and pays an additional premium.

From the policies I've had a quick gander at, none appear to specifically mention airlines going into administration. Sadly, you may be on your own.

Jet Airways seems to be in a perilous financial situation.

There have also been articles suggesting that the Malaysian Government is considering terminating Malaysia Airlines, a huge lossmaker, but no decision has been reached.

Southern Cross is based in NZ and receives very good reviews, so if it's excluding what you seek cover for, it's to be expected most others would also.

I'd avoid booking on either (a suggestion that isn't very helpful to you).
many, probably dozens of airlines will go belly up this year. Who's to say Qantas International won't fold ?

Quite a few in Europe have folded recently. Etihad just posted it's 3rd annual billion dollars loss in a row. Surely they will have to merge with Emirates now.
 
I will continue to look at each PDS from insurance companies bit by bit and list here what I find. I am only looking at multi-trip travel insurance coverage. I am not in anyway endorsing any company here, just listing what I find to assist others who may wish to be covered. I was actually very surprised to see that the company I have been with does not cover such an event - hence this posting.

Coverage:
Southern Cross (No Coverage)
1Travel Insurance (No Coverage)
Insureandgo ($1,000 coverage in event of airline collapse and you are stranded)

You can add TID to your list of no coverage

From their pds

“We will not pay a claim that arises because of any of the following ......

18. The financial collapse of any transport, tour or accomodation provider.”

And generally

“2. Any loss arising from the failure of any .... airline....due to their insolvency “
 
You can add TID to your list of no coverage

From their pds

“We will not pay a claim that arises because of any of the following ......

18. The financial collapse of any transport, tour or accomodation provider.”
when a big airline folds any insurer who was silly enough to insure against a failure, might also fail, depending on how they have reinsured.
 
That case is where you want to have paid via a Credit Card that allows you charge back. Won't help if the alternative costs more, but at least you get your original money back.

Note that the cost of the charge back doesn't get worn by your credit card issuer, but ends up (if the airline is insolvent) being worn by the merchant service provider of the airline.
 
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when a big airline folds any insurer who was silly enough to insure against a failure, might also fail, depending on how they have reinsured.

And when an airline is ALREADY looking very ill.....but you book with them anyway? Who would assume that risk? (Besides you of course...;)) It may sound mean... but Insurance is for Unforeseen events...not likely ones... (Actually I suspect you CAN insure against ANY level of risk... but the Premiums would no doubt be eyewatering....)
 
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