Common Carrier Strikes and "Known Perils"

When an airline or other travel supplier goes on strike, it can, of course, have a massive impact on travel plans. Not only will those who have tickets booked with those carriers be sorely inconvenienced, but other travelers might feel the pinch as well, as the ones who are now disenfranchised scramble to find bookings on other flights, airports and nearby hotels fill up with stranded travelers, and lines grow longer while patience grows shorter.

Travel insurance can certainly help in such instances, but – as with all travel insurance coverage – it's important to understand the role of the insurance policy in mitigating any strike-related issues, and when these benefits may or may not apply. In a general sense, a travel insurance policy ought to work, in cases of strikes, very similarly to the way it would work given any other scenario involving lengthy delay and/or cancellation. That is, if your travel plans are delayed by a strike for a period of time defined in your policy (usually it's 6 hours or more), you're generally entitled to reimbursement for food, lodging, and any other reasonable incidentals you might have to purchase as a result of being detained. If the strike requires you to re-book tickets on another carrier altogether, you may also be able to file a claim to reimburse you for the full cost of that additional ticket. Additionally, if the airline or other carrier didn't reimburse you fully for the tickets you'd lost due to their strike (which does happen on occasion), many travel insurance policies would operate on a "make-whole" philosophy and reimburse you for the difference between what you'd paid and what the airline gave back to you.

All of this assumes, however, that you've purchased your travel insurance policy while the strike was still an "unforeseen event." When travel insurance refers to "known perils," it really means that it's not willing to cover you for something that could reasonably have been expected to happen. We most often talk about "known perils" in relation to weather events, like tropical storms, but the term also applies to common carrier strikes. Just as a storm is considered a "known peril" once tracked on meteorological radar, a carrier strike can be considered a "known peril" once there's been an announcement that a labor dispute may be imminent. If you follow the news at all, you're probably aware that any possible strike in any industry is generally publicized days or even weeks before it actually occurs. Once that happens, the strike is no longer considered an "unforeseen event," but rather a "known peril." Even if you're unaware that your carrier has declared the possibility of strike when you purchase your travel insurance, the fact is that the travel insurance company is fully aware, and they are no longer going to be extending benefits to customers who purchase after that announcement has been made.

The best thing to do, given these parameters, is twofold: First, make sure to purchase your travel insurance policy as soon as possible after making your initial trip payment. Secondly, be mindful of any news surrounding potential travel suppliers before you secure your booking. If you book your travel with a carrier who has not announced any imminent strikes and immediately follow up by purchasing a suitable travel insurance policy, you should be protected from any labor dispute that may come up thereafter.

Written by on 9/11/13.
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