Travel Insurance Sold By Airlines and Travel Booking Websites May Give Rise to Legal Claims

The expensive insurance that consumers are prompted to opt in or out of when they book online travel on popular websites is big business- and, according to lawsuits and a U.S Senator, airlines and others may be illegally profiting from travel insurance by receiving a portion of the premiums paid by consumers for the insurance. The practice of sharing insurance premiums may violate some state laws, and customers of airlines and online travel booking websites may have viable legal claims as a result.

Two major airlines, Delta and JetBlue – are named as defendants in class action lawsuits alleging that that the companies are not disclosing to their customers that they profit by receiving a portion of the premiums from the sales of travel cancellation insurance policies endorsed on their websites. In addition, according to court records, American Airlines appears to have entered into a settlement in a case involving the receipt of a portion of travel insurance premiums paid by customers. .

These lawsuits follow allegations by U.S. Senator Edward J. Markey of Massachusetts that online website and travel agencies induce consumers to buy travel insurance with minimal coverage and numerous exclusions by requiring them to affirmatively accept or reject travel insurance before completing a purchase of a plane ticket. In addition to JetBlue and Delta, the following airlines reportedly sell travel insurance:

Alaska Airlines

Frontier Airlines

United

Online travel agencies that sell travel insurance reportedly including the following:

Cheaptickets

Expedia

Hotwire

Orbitz

Priceline

Travelocity

The practices focused on by Sen. Markey’s report include the sharing of insurance premiums between insurers and the airlines and online travel agencies. However, the airlines and travel agencies did not furnish specific information concerning revenue sharing to Sen. Markey’s staff, so the report makes no specific findings on this point. Two insurers- AIG Travel Guard and Allianz Global Assistance — reportedly provide travel insurance for 13 of the airlines and online travel agencies reviewed in Sen. Markey’s report (including those listed above). Sun Country airlines and website CheapOAir reportedly use a different travel insurance provider, Trip Mate.

Consumers with questions about possible legal claims concerning travel insurance purchases from airlines or online travel agency websites may contact Law Office of Christopher J. Gray, P.C. at (866) 966-9598 or via email at newcases@investorlawyers.net for a no-cost, confidential consultation.