Travel insurance -- what's with this 7/14 day bankruptcy provision?
Can someone tell me why travel insurance policies will only cover
airline bankruptcy/default if purchased within a specific time (7 or
14 days) of the time the tickets were purchased?
It seems to make no sense to me at all.
I can see that if, say, UAL is in the news as about to go bankrupt
then the insurance companies would not cover a UAL flight. But what
does 7 or 14 days have to do with anything?
Does anyone know a travel insurance policy that covers airline
bankruptcy WITHOUT reference to the 7/14 days provision?
It's incentive to purchase it early, just like covering pre existing
conditions if you purchase it within the seven days of the booking, but not
covering them if you don't. It also serves from having a huge rush when
something negative happens to that airline or whatever, for example, anybody
booked on a flight with XYZ airline may rush in and try for insurance the
day the unions announce they won't make any concessions or something like
that. They have also been known to stop coverage on certain cruise lines
for bankruptcy coverage, indeed many believe that is a sure sign the cruise
line is in trouble when the insurers stop covering them.
Bankruptcy coverage will only apply if the airline stops flying, you
couldn't get coverage for say US Air if the flights are still flying.