After a recent Air Canada strike left thousands of Canadians stranded abroad, industry specialists are warning that many travellers are more vulnerable than they realize.
Experts warned that relying on credit card coverage alone is often not enough in today’s uncertain travel environment, and that comprehensive travel insurance is a safeguard worth serious consideration.
In a report from CTV News, Travel Secure Inc. president Martin Firestone said that today’s travel environment includes many risk factors such as weather, government advisories, and labour disruptions, which were not as common in the past.
He noted that the recent Air Canada labour stoppage showed the value of both cancellation and interruption insurance. Cancellation insurance can apply when travellers are unable to board their flights, while interruption insurance is used if they are already travelling and need to return home.
Firestone explained that in the case of the strike, cancellation insurance would have covered non-refundable costs such as a cruise or an Airbnb, while interruption insurance would have paid for additional hotel nights and a one-way ticket back to Canada.
Many Canadians affected by the strike are now experiencing these challenges.
Among them is Karla Kumar, who spoke to CTV News from Lisbon, Portugal. Kumar and her family of four arrived in Europe on August 3, but their return flight was cancelled. Kumar said Air Canada informed the family that it could not rebook them on another airline. She did not have travel insurance on the tickets, and Air Canada only offered a refund or a future flight credit.
Kumar found a Delta flight home for Wednesday and presented it as an option, believing Air Canada was required under Transport Canada regulations to provide it, but the airline refused. The family purchased three of their four tickets with a personal credit card and contacted the provider to determine what coverage was available. Kumar said they learned that their card insurance did not apply to this type of labour stoppage.
According to Firestone, credit card insurance varies by provider, but typically has maximum limits, often around $2,500 for trip cancellation and $1,500 for trip interruption, which he said is often insufficient to cover the full cost of disruptions.
The Kumars said they believed they had taken the right steps but felt Air Canada did not act in good faith. They acknowledged, however, that for prepaid, non-refundable trips such as cruises or all-inclusive packages, they would consider travel insurance in the future.
Beyond individual travellers, the Air Canada strike has implications for the broader insurance industry. Insurers are likely to see an increase in claims for both trip cancellation and interruption, which could put pressure on underwriting practices for travel coverage.
The event highlights the challenge of pricing policies in an environment where labour disputes, weather events, and regulatory factors are becoming more frequent causes of disruption. Industry specialists say this may lead to higher premiums or tighter wording in travel policies to clarify what situations are covered. Credit card issuers, who often include travel insurance as a benefit, may also review coverage limits and exclusions in response to the financial impact of such strikes.
Travel protections may also depend on local laws. Canadians stranded in Europe by Air Canada are covered by European passenger protection rules, which require airlines to pay for replacement tickets and cover food and hotel expenses.
