DOT Proposes New Rule To Make it Easier To Refund Canceled Flights

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For decades, it has been notoriously difficult for travelers to get a refund from an airline if their flight is canceled. In many cases, carriers will simply issue a voucher for the money the passenger already spent. a future flight on that airline, essentially giving the airline an interest-free loan and leaving the customer without their cash.

On Wednesday, the US Department of Transportation published a new proposal that, among other things, would allow for a major expansion of consumer rights when it comes to cancelations and refunds for both domestic and international flights — and great peace of mind for those who are purchasing tickets.

Below, Select outlines the story behind the new proposal, how it would affect your future travels and how you can best protect yourself as a traveler.

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The DOT is fighting for fair compensation for flyers

What the new proposal could mean for travelers

In the DOT’s press release, Buttigieg says, “This new proposed rule would protect the rights of travelers and help ensure they get the timely refunds they deserve from the airlines.”

As of now, airlines aren’t legally bound to give customers any sort of compensation for delayed or canceled flights, as well as if you miss your flight due to illness. However, many airlines will accommodate passengers as best as possible. where they are required to provide assistance is when a passenger is “bumped” from a flight due to it being oversold.

The 116-page proposal, which is reminiscent of the EU’s Air Passenger Rights, puts forward that consumers flying domestically or internationally should be given a full refund based on their original payment method, whether that’s cash, credit or airline miles. Airline passengers will be eligible for a refund in any of the following circumstances, as long as they don’t accept alternative transportation from the airline:

  • If your flight is canceled
  • Whenever departure or arrival times are delayed by at least three hours for domestic flights or by at least six hours for international flights, if flyers opt-out of taking the flight
  • Anytime the departure or arrival airport changes or the number of connections is increased on an itinerary
  • If the original aircraft has to be replaced by another but there’s a major difference in the onboard amenities offered and overall travel experience as a result

The proposal also states that airlines would be required to issue vouchers with no expiration date whenever passengers are “unable to fly for certain pandemic-related reasons, such as government-mandated bans on travel, closed borders, or passengers advised not to travel to protect their health or the health of other passengers.”

Additionally, if the airline or ticket agent involved has received pandemic-related government assistance, refunds to the original method of payment would have to be provided, rather than travel credits or vouchers.

So, what happens next?

Where travel insurance comes into play

If this is signed into law, it’ll be a huge win for travelers everywhere. Personally, I’ve been on the wrong end of flight delays and cancellations and it’s never a fun experience.

Regardless of what happens, there are still some ancillary costs to consider whenever flights are canceled or delayed, and this is where using the right credit card comes in handy, as some offer better protections than others.

For example, in Dec. 2021, my flight from San Diego to Fort Lauderdale was canceled, forcing me to stay overnight at an airport hotel. I also had to buy additional food and pay for a taxi to get around. While the new DOT proposal is helpful to consumers in some ways, it still doesn’t include any coverage for any of the unexpected costs associated with flight cancellations.

Thankfully, in my case, the included travel insurance protections from my Chase Sapphire Preferred® Card covered these additional expenses. Travel insurance from a travel rewards credit card can also provide peace of mind when you’re dealing with other problems that may arise during your trip, including medical emergencies and rental car issues, among other stressful scenarios.

If you’re in the market for a new travel rewards credit card, consider signing up for one that includes complimentary travel insurance to protect you in case things go awry. Here are a few credit cards that offer comprehensive coverage for all your upcoming travels.

Chase Sapphire Preferred® Card

  • Rewards

    $50 annual Ultimate Rewards Hotel Credit, 5X points on travel purchased through Chase Ultimate Rewards®, 3X points on dining, 2X points on all other travel purchases, and 1X points on all other purchases

  • welcome bonus

    Earn 60,000 bonus points after you spend $4,000 on purchases in the first 3 months from account opening. That’s $750 when you redeem through Chase Ultimate Rewards®.

  • Annual fee

  • Intro APR

  • Regular APR

    17.49% – 24.49% variable on purchases and balance transfers

  • Balance transfer fee

    Either $5 or 5% of the amount of each transfer, whichever is greater

  • Foreign transaction fee

  • credit needed

The Platinum Card® from American Express

On the American Express secure site

  • Rewards

    Earn 5X Membership Rewards® Points for flights booked directly with airlines or with American Express Travel up to $500,000 on these purchases per calendar year, 5X Membership Rewards® Points on prepaid hotels booked with American Express Travel, 1X points on all other eligible purchases

  • welcome bonus

    Earn 100,000 Membership Rewards® points after spending $6,000 within 6 months of card membership. Apply and select your preferred metal Card design: classic Platinum Card®, Platinum x Kehinde Wiley, or Platinum x Julie Mehretu.

  • Annual fee

  • Intro APR

  • Regular APR

  • Balance transfer fee

  • Foreign transaction fee

  • Credit Needed

Chase Freedom Flex℠

  • Rewards

    5% cash back on up to $1,500 in combined purchases in bonus categories each quarter you activate (then 1%), 5% cash back on travel booked through the Chase Ultimate Rewards®, 3% on drugstore purchases and on dining (including takeout and eligible delivery services), 1% cash back on all other purchases

  • welcome bonus

    $200 cash back after you spend $500 on purchases in your first three months from account opening

  • Annual fee

  • Intro APR

    0% for the first 15 months from account opening on purchases and balance transfers

  • Regular APR

  • Balance transfer fee

    Intro fee of either $5 or 3% of the amount of each transfer, whichever is greater, on transfers made within 60 days of account opening. After that, either $5 or 5% of the amount of each transfer, whichever is greater.

  • Foreign transaction fee

  • credit needed

United℠ Explorer Card

  • Rewards

    2 miles per $1 spent on United purchases; 2 miles per $1 spent on dining, eligible delivery services and hotel stays; 1 mile earned on every $1 spent on all other purchases

  • welcome bonus

    Earn up to 70,000 bonus miles: 60,000 bonus miles after you spend $3,000 on purchases in the first 3 months your account is open; plus, an additional 10,000 miles after you spend $6,000 total on purchases in the first 6 months your account is open

  • Annual fee

    $0 intro annual fee for the first year, then $95

  • Intro APR

  • Regular APR

  • Balance transfer fee

  • Foreign transaction fees

  • credit needed

bottom line

Editorial Note: Opinions, analyzes, reviews or recommendations expressed in this article are those of the Select editorial staff’s alone, and have not been reviewed, approved or otherwise endorsed by any third party.

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