Affected by U.S. flight cancellations? Travel insurance might not help you

An Air Canada plane sits at Vancouver International Airport in Richmond, B.C., on Sunday, Aug. 17, 2025. THE CANADIAN PRESS/Ethan Cairns

MONTREAL — As the U.S. government shutdown leads to thousands of cancelled flights, some Canadian travellers find themselves caught up in the stateside travel chaos.

But there's a chance that even those who bought trip insurance might be left holding the bag.

More than 8,300 departures south of the border have been cancelled since Friday, with the proportion of scrapped flights hovering around 10 per cent on Sunday and nine per cent on Monday, according to aviation analytics firm Cirium.

Hundreds of thousands of Canadians fly to and from the U.S. each month. Those who purchased cancellation insurance before the government shutdown was announced as a travel advisory should be eligible for compensation, said Marty Firestone, president of Toronto-based insurance firm Travel Secure Inc.

"After that date, any purchase of a policy will not cover anything related to the government shutdown or related air controller issues," he said.

That means travellers who bought a policy more recently or held off entirely may be out of luck for meal, hotel and transport coverage — though the airline would still owe them a rebooking or a refund for the cancelled trip.

"The key here for this specific situation is having insurance in place before the advisory went in place, because now it's considered a 'known event,'" said Matt Hands, vice-president of insurance at Ratehub. In the insurance world, a known event is a foreseeable one, which is thus excluded from coverage.

Some credit cards offer travel insurance that includes flight cancellation or interruption coverage. But consumers should still review their terms and conditions to confirm what is covered, said Hands. For example, the insurance may only apply if the trip was booked using that card.

American flight controller shortages stemming from the federal shutdown prompted U.S. regulators to order air traffic reductions starting last Friday. Since then, wintry weather across parts of the continent has exacerbated the staffing disruptions.

Several Canadian airlines told The Canadian Press last week that passengers could be affected, particularly those with connecting flights in the United States.

Even direct cross-border routes between major hubs have been hit. Air Canada informed passengers booked on a flight from New York City to Toronto on Monday that the evening trip was "cancelled because of air traffic control restrictions."

"Air traffic control restrictions can happen if there are too many aircraft sharing the same airspace," read the email sent to customers and obtained by The Canadian Press.

The average cancellation rate over the last few days has already exceeded the U.S. Federal Aviation Administration requirement of four per cent — a figure that was set to rise to six per cent Tuesday and 10 per cent this Friday — according to Cirium.

The FAA warned Monday that staffing at more than a dozen towers and control centers could delay planes departing for Phoenix, San Diego, the New York area and Houston, among other cities.

The agency also expanded its flight restrictions Monday, barring business jets and many private flights from using a dozen airports already under commercial flight limits.

The U.S. Senate passed legislation Monday to reopen the government, but the bill still needs to clear the legislature's lower house and final passage could be days away — with further flight disruptions possible through the rest of the month.

"It's going to take a good one week to 10 days, if not two weeks, which is going to lead into that Thanksgiving period when it's their busiest day of travel," Firestone said.

"This has an effect on so many people, including Canadians who are travelling for business and can't run the risk of getting stuck in New York for two or three days because of this shutdown. It's a domino effect."

U.S. Transportation Secretary Sean Duffy made clear last week that flight cuts will remain until the FAA sees staffing levels stabilize at its air traffic control facilities.

This report by The Canadian Press was first published Nov. 11, 2025.

— With files from The Associated Press

Christopher Reynolds, The Canadian Press