ST PETE BEACH, FL November 30, 2011 – The recent bankruptcy announcement of American Airlines has many travelers looking into travel insurance to protect their expenses. According to Squaremouth.com, a site for comparing and purchasing travel insurance, travelers should not buy a travel insurance policy to cover their American Airlines ticket. “Although many travel insurance policies can cover someone in the event their airline, cruise line or tour operator goes bankrupt, once the bankruptcy is announced, new policies will not cover anything resulting from that bankruptcy,” says Sarah Byrne, Marketing Manager at Squaremouth.
“As we’re seeing with American Airlines, even large organizations can run into financial trouble. This is one of the unforeseen circumstances that can ruin a trip,” explains Kathy Townend, Marketing Manager at CSA Travel Protection. “If a traveler purchases a plan with financial insolvency coverage, they can be reimbursed if their trip is cancelled or interrupted due to the travel supplier’s financial default.”
Although Financial Default coverage is no longer available for American Airline customers, travelers looking for coverage for another airline or cruise line should be aware that many insurance providers only offer bankruptcy coverage if the travel insurance policy is purchased within 14 days from the first trip payment or deposit.
“Even when a trip is booked well in advance with only a minimal deposit, that date still determines how long the Financial Default benefit is available for purchase,” explains Chris Harvey, CEO of Squaremouth.
Most travel insurance providers also have a 14 day wait period after the policy is purchased. As a result, if someone bought a policy today, they would not be able to make a travel insurance claim within the first two weeks due to bankruptcy.
If someone misses the 14 day time frame to buy Financial Default coverage, they should look for policies from Travelex Insurance Services, CSA Travel Protection and HTH Worldwide. CSA and HTH both offer Financial Default coverage if the policy is purchased before the final trip payment, while Travelex’s Basic, Select and Max policies offer the benefit at any time.
It’s important to remember, if a traveler purchases travel insurance directly from the airline and that airline goes bankrupt, coverage may not be valid. “To protect your travel investment, whether a single airline ticket purchase, a cruise or other vacation, third party travel insurance is the always the best option,” says Byrne.
Squaremouth is America’s fastest growing travel insurance comparison site, helping customers instantly quote, compare and buy policies from every major carrier. Squaremouth has web sites in the US and UK, and an extensive network of partner sites worldwide. The company is headquartered in St Pete Beach, FL., with offices in Fort Wayne, IN. Visit Squaremouth.com or Squaremouth.co.uk.
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