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Will Travel Insurance Cover Unused Hotel Nights Due to a Delayed Flight? A TravelSort Client booking a stay during the busy holiday season had this question, when inquiring about travel insurance. A flight delay could lead to missing the first night (or more) of a trip, which could run into the thousands of dollars, and during holiday season, resorts often adhere to strict cancellation policies that require prepayment weeks if not months ahead of the stay dates.
Typically, purchased travel insurance, such as Allianz, which we recommend, only covers prepaid accommodation cost that you'd otherwise lose, in very particular circumstances (check the travel insurance you're considering, since each policy is different; the below is for our recommended Allianz plan):
Trip Cancellation
- Your travel carrier cannot get you to your intended destination for at least 24 hours from the originally scheduled arrival time due to one of the following reasons: A. Natural disaster; B. Severe weather; C. A labor strike, unless threatened or announced prior to your purchase of the policy; or D. An FAA or foreign equivalent mandate; and:
- You get to your original destination another way; then Allianz will:
- Reimburse for the reasonable cost of the alternate transportation, less any available refunds; and
- Reimburse the cost of any lost prepaid accommodations caused by delayed arrival, less any available refunds
Note that by implication, this travel insurance policy would NOT cover a flight delayed due to any other reason other than the four listed above, for example a mechanical issue, airline labor issues other than an actual strike, an overbooked flight, an IT outage, etc. In all these scenarios you wouldn't be able to invoke trip cancellation coverage or use your ability to get to your destination by some other means to get reimbursement for your lost prepaid hotel costs. So what can you do?
1. Stay at an Airport Hotel or Less Expensive Property the First Night
One approach is to stay at an airport hotel or less expensive property the first night of your stay, so that if you do end up with a delayed flight and eating the cost of the first night, at least it won't be as expensive. This may also make sense, as in our client's case, if arriving after a long red eye flight and wanting to recuperate anyway before onward travel.
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2. Purchase Cancel for Any Reason Insurance
If you think there's a good chance you won't want to make the trip at all if your outbound flight is delayed (and during the holiday season, with packed flights, you may not be able to fly out until days later, significantly changing the value proposition of the trip) then it could be a good idea to purchase Cancel for Any Reason (CFAR) insurance. For Allianz, this is called Cancel Anytime insurance, and covers up to 80% of actual losses, as long as your reason for cancelling isn't one that isn't covered, such as a war, nuclear reaction or radiation, intentional self-harm, government prohibition, etc. that are listed in the policy.
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3. Travel to a Place with Multiple Options to Get There
It can be especially tough if an airline's travel delay leaves you with no good alternative way to get there. The more routes, by different carriers, that serve your intended destination, the greater your potential for finding another way of getting there, at least if the delay isn't weather-related. Or consider a destination closer to home that you could drive to or take the train to.
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4. Ask the Hotel for Leniency
While a hotel isn't obligated to refund a night you don't use, if it's already past the cancellation deadline, most luxury hotels we've dealt with have agreed to either refund a night a guest was unable to use due to a delayed arrival that was no fault of their own (the hotel typically asks for proof from the airline) or has provided a credit toward a future stay.
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If you've had a delayed arrival and that meant you missed a hotel night that was already prepaid and was within the cancellation period, what happened?
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