Some airline companies were having difficulties financially during the year 2008, and there were rumors of mergers among other airlines that were more financially stable.  If this happens, are your flights transferred to another company? Or, what happens when there are inspection problems and they delay flights or cancel them altogether?

The easy answer is that travel insurance covers your money but it certainly will not cover your trip.  When it comes to cancellations or flight delays, you should be able to get a refund, but if not then yes the insurance would be helpful.  In order to avoid these circumstances, ask before paying for your trip.  Buying online provides a lot of good deals, but unfortunately it may not be able to answer your questions like a representative could.

Normally, an airlines financial failure would be included in the trip cancellation policy.  And be sure to read and understand the policy and see if it includes any exclusion.  If the insurance company fails, the financial failure definitely won’t be covered by the insurance but only the airline.  If you are buying just a minimum policy, make sure of what you are paying for, because if you are buying just enough to get by it may not cover financial failure at all.  Be aware of the fine print on cheap travel insurance policies.

Financial failure coverage may also be considered as an unforeseen circumstance.  You should be cautious with some companies that regard financial failure as unforeseen and therefore is not covered by your insurance policy.  This is just another loophole that these companies create so that they dont have to pay on the policy.  This is why you must be careful when shopping for policies such as one way travel insurance.

The final thing to be aware of with financial failure coverage is the many airlines stay up and running when they file bankruptcy, and may just be operating with business as usual until they merge with another airline.