A federal rule that will make it harder for air passengers to get airline compensation for some delays is giving travel insurers a new selling point, as demand for travel cover keeps growing.
The Department of Transportation (DOT) published a final rule in September that removes 10 specific types of disruption from the category of delays and cancellations considered within an airline’s control. They include aircraft damage caused by extreme weather and the removal of an unruly passenger. Problems with scheduled maintenance, crew scheduling and routine cleaning or restocking remain the airline’s responsibility.
The rule was due to take effect on October 19, but the DOT has since postponed it to February 1, 2027, at the request of industry body Airlines for America, which said carriers needed more time to set up reporting. The rule implements Section 511(b) of the FAA Reauthorization Act of 2024.
Federal law still requires refunds for certain cancellations. But airlines’ meal and hotel vouchers are voluntary commitments that usually apply only to delays within their control. In its Federal Register notice, the DOT acknowledged that the total value of amenities and compensation airlines provide to passengers is expected to fall as a result of the rule.
Travel Guard, part of Zurich Cover-More, said most of the 10 reclassified causes would generally qualify for its trip delay cover, subject to policy terms.
“These newly exempted causes of flight delays are not especially common, but we understand that the new rules might make travelers feel less protected when they fly,” said Robert Gallagher, chief executive for North America at Zurich Cover-More.
Trip delay benefits typically reimburse expenses such as meals and accommodation, up to a set limit, once a delay passes a minimum number of hours and is caused by a covered reason. Gallagher said travel insurance can also cover knock-on costs that airlines don’t, such as a missed cruise departure or lost tour days.
The rule change comes as more Americans insure their trips despite record costs. Travel insurance comparison site Squaremouth said insured trips rose 12.9% year on year in the third quarter of 2026, with the average trip costing more than $7,400.
A survey of more than 3,000 Squaremouth customers found that making memories with family and friends was the top reason people prioritize travel across all age groups. Some 78% said they had experienced travel “FOMO,” or fear of missing out, driven more by friends and family sharing their trips than by social media.
For agents and travel advisors who sell travel insurance, the rule gives a clear reason to raise trip delay cover with clients, especially those traveling for high-cost trips such as cruises or tours where a missed connection is expensive.
The delay to February gives distributors time to update client materials and explain the change before it takes effect. Clients should check each policy’s delay threshold in hours, the covered causes and the benefit limits, as these vary widely between plans.
