Andrew Bret Wallis | DigitalVision | Getty Images<\/p>\n<\/div>\n<\/div>\n<\/div>\n
More consumers are buying travel insurance during the federal government shutdown<\/a> \u2014 but these insurance policies may not offer the catch-all protection that buyers expect.<\/p>\n Much depends on the fine print, experts said.<\/p>\n Squaremouth, an online platform for comparing travel insurance policies, has seen the volume of insurance quotes increase 8.5% year-over-year between Oct. 1 and 27. Sales have risen by 7.9% over the same period.<\/p>\n Buyers seem to be hedging<\/a> against the financial risk of the government shutdown upending their travel plans, experts said. Air traffic controllers and TSA agents are essential government employees working without pay<\/a>, and in previous shutdowns, travel has been disrupted.<\/p>\n Hopper, a travel website, has seen purchases of “disruption assistance,” which offers certain protections in the event of flight cancellations or delays, increase 35% between mid-September (before the shutdown) and early October (after it began).<\/p>\n “We see it time and again when flight delays or cancellations are in the news a lot,” Patrick Steadman, Hopper’s head of disruption assistance.<\/p>\n<\/div>\n Elijah Nouvelage\/Bloomberg via Getty Images<\/p>\n<\/div>\n<\/div>\n<\/div>\n “Essential” workers like air traffic controllers and TSA agents work without pay during a shutdown, while others are furloughed. That raises the odds of staff shortages and resulting airport delays.<\/p>\n Flight delays have already increased<\/a> during the shutdown, and airlines have warned in recent weeks<\/a> of likely flight delays the longer the political impasse drags on.<\/p>\n The shutdown, which started Oct. 1, is already the second-longest in U.S. history.<\/p>\n Meanwhile, the end-of-year holidays, historically among the busiest seasons for travel, are fast-approaching. For example, more than 3 million people were screened<\/a> at U.S. airports on the Sunday after Thanksgiving in 2024, breaking a single-day record.<\/p>\n<\/div>\n Here’s a look at more stories on how to manage, grow and protect your money for the years ahead.<\/em><\/p>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n About 45% of Americans plan to spend money on flights or hotels this holiday season, according to a NerdWallet poll<\/a> published in October. They expect to spend an average $2,586 for such expenses, and a collective $311 billion, it found.<\/p>\n “Ultimately, [travel] is (in our mind) what probably brings this shutdown to a close,” Chris Krueger, a strategist at Washington Research Group, wrote in a note Oct. 29. “Once TSA begins missing paychecks, airport lines (and coverage) will likely force resolution like in previous shutdowns,” he wrote.<\/p>\n Air traffic controllers, already in short supply, missed their first full paychecks on Tuesday.<\/p>\n The longest U.S. shutdown, during President Donald Trump’s first term in office, lasted 35 days and came to an end after a shortage of air traffic controllers\u00a0snarled air travel in the New York<\/a>\u00a0area. TSA screeners called out sick<\/a> in elevated numbers as they were asked to work without pay.<\/p>\n<\/div>\n Flight delays or cancellations may, in certain cases, lead consumers to shoulder unforeseen costs for lodging and meals, or miss out on prepaid activities like tours, for example.<\/p>\n But travel insurance won’t always cover consumers for such costs if the shutdown upends their itineraries.<\/p>\n For example, travelers likely wouldn’t be covered if they miss a flight due to being stuck in a long airport security line, said Terra Baykal, senior marketing manager at World Nomads, a travel insurer.<\/p>\n She recommends people arrive at least three hours before departure, even for domestic flights, as the shutdown persists to prevent long lines from derailing a trip.<\/p>\n<\/div>\n World Nomads typically sees its insurance sales fall at this time of year, but they have declined less than usual with the shutdown, Baykal said.<\/p>\n In 2024, the company saw a 17% drop in U.S. travel insurance plans sold, from the Sept. 5 to 30 period to Oct. 1 to 26. They dropped by a lesser amount, 10%, this year, suggesting there’s been more demand amid the shutdown, Baykal said.<\/p>\n Travel insurance is largely meant to cover unforeseeable events, said Chrissy Valdez, senior director of operations at Squaremouth.<\/p>\n However, the shutdown is now a foreseeable event, Valdez said. That means policies purchased on or after Oct. 1 likely wouldn’t cover certain claims.<\/p>\n For example, a federal worker who bought travel insurance after Oct. 1 and then subsequently was laid off or furloughed due to the shutdown may not be able to cancel their trip and claim insurance benefits under a “cancel for work reasons” clause, Valdez said.<\/p>\n<\/div>\n Travelers can get indirect coverage during the shutdown in some cases, depending on their insurance policy and airlines’ stated rationale for a flight disruption, experts said.<\/p>\n Most insurers require there be a “common carrier” disruption, like a mechanical failure, in order to pay benefits, Valdez said.<\/p>\n As long as an airline categorizes any sort of disruption \u2014 such as a lack of air traffic controllers \u2014 as a “common carrier” delay or interruption, travelers may qualify for insurance reimbursement, wrote<\/a> Squaremouth spokesperson Lauren McCormick in a recent blog post.<\/p>\n “Even during a government shutdown, many disruptions to travel are covered under the ‘common carrier’ category,” she wrote. “Essentially,\u00a0this is a loophole\u00a0that may allow you to claim reimbursement as an indirect result of the shutdown,” she added.<\/p>\n<\/div>\n There are generally caveats and limits to travel insurance policies, too, such as dollar limits on certain benefits and the requirement that a delay last for a minimum amount of time.<\/p>\n Certain optional policy benefits, like “cancel for any reason” provisions, may grant travelers additional flexibility if they want to cancel an upcoming trip rather than risk the headache of a delay or cancellation, said Baykal, of World Nomads.<\/p>\n However, these benefits also come with caveats: For example, many insurers require policyholders to cancel at least two days before their trip starts. Insurers also generally don’t reimburse policyholders for the full cost of the trip; they may reimburse 75% of nonrefundable trip costs, for example, Baykal said.<\/p>\n “We always recommend a customer reads through policy details if it comes to the point of making a claim,” she said.<\/p>\n Separately, airlines have made varying financial commitments to travelers who experience flight disruptions, which are detailed on a dashboard<\/a> maintained by the U.S. Department of Transportation.<\/p>\n<\/div>\n<\/div>\n\nTravel delays are already mounting<\/h2>\n
More from Your Money:<\/h2>\n
What travel insurance does and doesn’t cover<\/h2>\n
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