The CrowdStrike software glitch that stranded airline passengers (and additionally was responsible for crashing computers and causing problems in hospitals coast to coast) forced a reckoning among those engaged in travel for sports tourism, making them realize it was time to rethink that I-don’t-need-travel-insurance mindset.
The fact that it took place on the eve of the Olympics wasn’t wasted on anyone trying to travel overseas, either.
As The Motley Fool noted, “The fact that the airline industry has become heavily dependent on technology isn't necessarily a bad thing. But it also means that even if the weather is perfectly clear, and even if every single plane that's scheduled to depart passes all of its inspections, thousands of flights could still face delays or cancellations due to the inability to access data on a computer.”
Case in point: July 19. Flight tracking service FlightAware.com reported over 5,000 planes were grounded, and 23,000 flights were delayed globally, said reporters at the website for Insurance Business Magazine.
Ultimately, the problem was classified by the U.S. Department of Transportation as “controllable,” which is jargon-speak for something for which an airline needs to compensate passengers. (By contrast, an example of an “uncontrollable” event would be something weather-related.) And a controllable event means consumers may be entitled to reimbursements for hotels and food.
"I think the most important thing to know is the Department of Transportation has ruled this as a controllable event," Dan Green from the travel insurance company Faye told reporters at the ABC’s Chicago affiliate. "So airlines are on the hook to get you home if you're currently on a trip, or to find you an alternate flight to get you to your destination. And they are supposed to in most cases pay for reasonable expenses, such as lodging and food along the way."
But what about when airlines object – as they often do?
Those with travel insurance policies are able to file a compensation claim.
“Major tech disruption of cloud services by a major IT corporation has caused widespread flight delays and cancellations, both domestically and internationally. Any delays or cancellations of scheduled flights by the airlines will get covered under travel insurance,” says Vivek Chaturvedi, Chief Marketing Officer and Head of Direct Sales, Go Digit General Insurance.
What’s more, travel insurance may be able to pay above and beyond the cost of a new flight.
“You can file claims even if the airline has issued compensation for the inconveniences suffered. “If the cancellation and delays are covered as per policy terms and conditions, then we will pay the claim (irrespective of measures taken by airlines),” says Aashish Sethi, Head, Health SBU and Travel, Bajaj Allianz General Insurance.
The Motley Fool noted that the most important thing to remember is that while airlines should be able to help those experiencing flight delays (such as with meal vouchers or even a hotel stay, assuming the problem is both extensive and the airline’s fault), it may be impossible to get an airline representative on the phone, on the chat line or in person at an airport – and those traveling with small children may opt for the path of least resistance and check into a local hotel for the duration. So it's good to have travel insurance in case you end up incurring costs the airline might not volunteer to pay.
Right now, insurance companies are settling in and examining the multitude of cases resulting from the CrowdStrike outage.
“Insurers are bracing for hundreds, if not thousands, of claim notifications from organizations that are impacted by the CrowdStrike event,” Ryan Griffin, a partner focused on cyber at insurance broker McGill and Partners, told reporters at Insurance Journal.
About the Author
