TORONTO — We can all agree that travel insurance is a must when travelling, especially nowadays with COVID-19 being a permanent fixture and flight delays and cancellations a regular occurrence. But with the 2022 broadening of the Airlines Passenger Protection Regulations (APPR), has travel insurance become a non-essential add-on?

Implemented on Sept. 8, 2022 in response to a backlog of thousands of air passenger complaints amid the restart of post-pandemic travel, the Canadian Transportation Agency’s Regulations Amending the Air Passenger Protection Regulations require airlines to provide passengers with either a refund or rebooking (at the passenger’s choice) when there is a flight cancellation or lengthy delay due to a situation outside the airline’s control.

Before this date, the AAPR required refunds to be provided for flight disruptions only within the control of airlines. Now, if there’s a delay of three hours or more or a cancellation outside the airline’s control, and the airline cannot provide the passenger with a confirmed reservation leaving within 48 hours of the departure time on the original ticket, the airline must provide a refund or make alternative travel arrangements for the passenger, free of charge. 

According to then-Minister of Transport Omar Alghabra, the COVID-19 pandemic revealed a gap in Canada’s air passenger protection network, hence the amended APPR. And while the worst of the pandemic is thankfully behind us, the broadened regulations are still providing peace of mind for travellers, particularly in recent weeks during which the travel industry was impacted by both a WestJet mechanics’ strike and a global tech outage. 

But if travellers are being compensated or accommodated as a result of APPR, why, then, is there still a need for travel insurance, which often includes flight delay/cancellation coverage?

Speaking with Travelweek, Sheila Burns, Director of Health and Disability Policy at Canadian Life and Health Insurance Association (CLHIA), says that APPR only apply to flights that are cancelled or delayed by the airline, whether the matter is within their control or not. Trip cancellation insurance, on the other hand, can provide coverage for a wider variety of problems that may result in a trip being cancelled.

“These will vary by policy so it’s important to read the contract, but some examples include an unexpected medical emergency or death of the insured, a person they’re travelling with or an immediate family member, a legal obligation like jury duty, or cancellation of a business meeting,” says Burns. “Other examples include being called to service in case of reservists, active military, police, essential medical and fire personnel, or an unforeseeable, involuntary termination from your permanent employment without cause.”

Also noteworthy, adds Burns, is the fact that trip cancellation insurance can cover more than the cost of a flight.

“Many policies will reimburse, up to the covered dollar amount, prepaid portions of the trip that are non-refundable or non-transferable to another date where these are cancelled due to a covered reason. These can include, for example, pre-paid, non-refundable expenses for accommodation, car rental, a cruise or excursions,” she says. 

Dan Keon, VP, Marketing & Insights, Allianz Global Assistance, also touts the added perks of travel insurance when compared to the APPR. Noting how “it’s great to see that the Canadian Transportation Agency is strengthening the APPR,” Keon tells Travelweek that despite their protections, there continues to be value in obtaining travel insurance for a number of situations that aren’t covered by CTA’s regulations.

“These include pre-paid travel arrangements outside of flight bookings; trip cancellations due to a variety of covered reasons within travel insurance that may include (but are not limited to) unexpected injury or illness of the primary traveller or travelling companion, employment changes, and travel advisories issued by the Canadian government; trip interruption coverage in the event that a traveller needs to come home earlier or later than planned; lost/stolen baggage and baggage delay; and unexpected/unforeseen medical emergencies,” says Keon, who adds that the Government of Canada also recommends that Canadians buy travel insurance if they plan to travel outside Canada – even when crossing the border for just a day.

All this is well and good, but with the amended APPR garnering much press since their launch, has travel insurance been pushed out of the spotlight? Has there been a decline in travel insurance bookings in the two years since the amended APPR were implemented?

“We haven’t heard any suggestion that people are purchasing less travel insurance,” says Burns. “In fact, the experience of the pandemic appears to have made people more aware and appreciative of the value of travel insurance.”

But if clients are considering opting out of travel insurance, thinking that APPR are enough to cover the unexpected, Burns has this piece of advice for travel advisors:

“The most important piece of advice for all insurance, including travel insurance, is to make sure that you know what you’re covered for, including dollar amounts, so you can be sure to purchase the right amount of protection. For example, you may assume that coverage associated with your credit card is enough, but it may not cover everything you expect, and will only cover those parts of the trip paid for using that credit card.”

Keon also concurs, adding: “When booking travel arrangements, Canadians rely on their trusted travel agent for the best advice. It’s important for agents to educate their clients on travel protection and clearly explain the different types of coverage available, along with what is not covered. Agents are encouraged to emphasize the peace of mind and financial protection travel insurance provides when unexpected events arise, so that their clients can relax and enjoy their vacation to the fullest.”

To learn more about how trip cancellation and trip interruption work, click here. 

This article originally appears in the Aug. 1 issue of Travelweek. To read the issue, click here.