Manulife and other Canadian travel insurers have classified jet fuel shortages as a "known event," removing them from coverage for trip cancellations.
This change shifts the financial risk of fuel-related travel disruptions from insurance providers to the travelers. Because the shortage is now considered a predictable risk, policies will no longer reimburse those whose trips are canceled due to a lack of fuel.
Most insurers declared the shortage a known cause on April 22, 2024 [1]. Consequently, travel insurance policies purchased on or after May 5, 2024, are affected by this exclusion [2].
Insurance companies view the ongoing jet fuel shortage as a predictable risk rather than an unforeseen accident. By labeling it a known event, insurers limit their financial exposure to widespread cancellations across the Canadian travel market [3].
Martin Firestone, president of Travel Secure, said, "It’s not a surprise."
Travelers who purchased policies before the May 5, 2024, cutoff may still have coverage, depending on the specific terms of their agreements. However, new policyholders must now find alternative ways to protect their investments, or accept the risk of fuel-driven delays.
Industry experts note that once an event is deemed "known," it typically ceases to be an insurable risk under standard travel policies. This prevents insurers from paying out massive claims for a situation that is already widely recognized as likely to occur [3].
“Travel insurance policies purchased on or after May 5, 2024, are affected by this exclusion.”
The reclassification of fuel shortages as a known event signals a broader industry trend where systemic infrastructure failures are moved from 'unforeseen' to 'predictable.' For Canadian travelers, this means that standard insurance is no longer a safety net against fuel volatility, necessitating more flexible booking options or higher-tier coverage to mitigate the risk of total financial loss during a cancellation.
