The Financial Default benefit of travel insurance can reimburse a traveler for their prepaid and non-refundable trip costs if their trip is canceled because their travel provider ceased operations for financial reasons.
Many policies include this benefit within the Trip Cancellation coverage, however it is often time-sensitive. In order for a traveler to be eligible for the Financial Default benefit, they must buy their policy within 10-21 days of making their initial trip payment, depending on the policy. This can be any payment or reservation toward their trip, such as airfare, hotel accommodations, or a tour, among others.
Additionally, there may be a 10-21 day wait period after the policy is purchased before this benefit goes into effect. This means, if a traveler buys their policy and their travel provider goes bankrupt 5 days later, they will not be covered by the Financial Default benefit.
However, in the case of Thomas Cook, Financial Default coverage may not apply, depending on where a traveler bought their travel insurance. This is because some policies do not provide coverage if the company that solicits the travel insurance goes bankrupt.
This information is time-sensitive and may vary by policy. If you have questions about a specific policy, please contact us directly at 800-240-0369. Our customer service representatives are available from 8am to 10pm ET, seven days a week, and are delighted to help!