• The latest surge in Covid infections, due to the omicron variant, is wreaking havoc with airline schedules.
• While in many cases airlines must refund or compensate affected passengers for cancellations, that's not always the case.
• "Cancel for any reason" insurance plans, while costly, are the surest way to guard against spoiled vacations.

Air travel continues to be disrupted this week by the national surge in Covid infections, and many worried Americans may be wondering whether or how to ensure — and insure — upcoming or planned trips.

Some 2,221 flights nationwide were canceled Thursday alone, according to website FlightAware. That was the 12th straight day airlines axed more than 1,000 flights, as employees with the omicron or delta variants of the virus called in sick to already short-staffed carriers and winter weather hit parts of the country.

"These interruptions right now are insane," said Jeremy Murchland, president of travel insurer Seven Corners in Carmel, Indiana. "I've never seen anything like it myself."

Traveler inquiries at Seven Corners, which sells both comprehensive travel insurance policies and medical coverage-only plans, have doubled in the past week or so compared to the last few months of 2021, he added.

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The good news is that, under federal law, if your airline cancels or "significantly changes" your flight and you opt not to travel, the carrier owes you a refund in the original form of payment. "It's as simple as that," said Willis Orlando, senior product operations specialist at Scott's Cheap Flights.

However, there are two caveats, he added. First, airlines can set their own definition of "significant."

"Some, like United, consider any change of 30 minutes or more significant, while others, like American, won't generally offer a refund for changes of less than four hours," Orlando said, adding that most other carriers "fall somewhere in between."

Secondly, airlines are not required to compensate passengers for anything apart from ticket cost if there are delays or cancellations. So if you're delayed but choose to wait it out and travel, you might not get any relief — financial or otherwise.

"Many [carriers] do so anyway, as a way to retain customer loyalty and uphold their brand image," Orlando said. "However, generally even airlines that routinely do offer such incidental compensation sometimes draw the line when it comes to mechanical failures, weather, or other events 'beyond their control.'"

What if it's not just one or two flights that are impacted but an entire vacation, say, with a hotel stay, car rental, attractions tickets and more? Or, what if the travel itself isn't the problem but being able to test for Covid before, during or after the trip is? That's where trip insurance comes in.

"If folks are nervous about their trip being interrupted, or not wanting to travel, trip insurance might be a decent option," Orlando said. "We advise to do your homework and look into a well-regarded policy that is truly 'cancel for any reason.'"

Cancel for any reason, or CFAR, plans are exactly that: You can cancel for any reason whatsoever for a full refund, possibly minus administrative fees. However, while standard, less generous trip insurance plans generally cost 4% to 8% of a travel purchase price, CFAR coverage can often add up to 50% more on top of actual travel costs, according to Murchland at Seven Corners.

"That's a premium but, again, it's about peace of mind right now," he said. "A lot of people still want to travel but it's the worry about traveling and what happens 'if.'"

Megan Moncrief, chief marketing officer at online travel insurance marketplace Squaremouth.com, cautioned travelers to double-check with their airline before buying any additional insurance.

"A lot of carriers are still refunding fares or allowing passengers to move their travel dates or get travel vouchers," she said. "We definitely don't recommend [travel insurance] if you can get your money back elsewhere."

In addition, CFAR plans are generally only available for purchase up to 14 days to 21 days after the initial booking of a flight or package, Moncrief said.

"The majority of policies purchased on our site for international travel are a little more than 30 days prior to the trip," she said, meaning that most of St. Petersburg, Florida-based Squaremouth's U.S. clients head abroad with less comprehensive plans with stricter reimbursement criteria.

That's not an issue if you're simply worried about contracting Covid abroad and perhaps having to stay in quarantine overseas for a time, as many standard plans cover that, Moncrief noted. "While you're abroad, you get medical coverage if you're hospitalized, for example, as well as additional lodging and transportation costs if you're quarantined and can't return home," she said. "That can extend usually for seven days, sometimes more, after your [original] planned return date."

Moncrief sees access to Covid testing as a potentially bigger problem for Americans headed abroad. "It seems that with air travel just a mess right now, and testing super backed up – coupled with many countries tightening their entry requirements – it's just a perfect storm.

"Where we're probably headed in terms of issues for travelers is: You have everything planned, your destination is open but you now can't logistically get your testing done in time," she added. A CFAR plan would have you covered, whereas most others would not.  

"If you're worried about contracting Covid, a standard travel insurance policy is fine," Moncrief said. "If you have any other Covid-related concerns, that's when you want to look at cancel for any reason."

Orlando at Scott's Cheap Flights says travelers should also familiarize themselves with the protections credit card issuers offer.

"Many credit cards these days have built-in trip interruption insurance, or better, which oftentimes will cover just as much, if not more, than separately purchased trip insurance," he said.

"You'd be amazed at how many folks have this benefit and never take advantage of it because they don't know it exists," Orlando added. "You're paying a yearly fee for your credit card, so we can't advise strongly enough to read up on the benefits and potentially save yourself the trouble of looking into trip insurance."

If you do opt for additional insurance, Murchland at Seven Corners recommends turning to a professional for guidance. "Fine, be your own travel agent and book your own flight, hotel and car but then call and talk to an agent and make sure you're getting the right travel insurance," he advised. "Don't try to interpret things for yourself in this current environment; it's just not worth it."

And if you don't want to spring for more expensive CFAR coverage? "At least get a plan that is going to have trip cancellation, travel delay and trip interruption coverage, Murchland said. "Those three terms are important."