United Hit with Class Action Over Sale of ‘Unneeded’ AIG Travel Guard Insurance in Light of COVID-19 Refund Policy Changes

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A proposed class action alleges pre-departure travel insurance sold through United Airlines’ website is wholly unnecessary in light of certain policy changes issued by the carrier at the onset of the COVID-19 pandemic yet continues to be advertised to flyers. 

The 17-page lawsuit, filed in New Jersey District Court on May 25, claims defendants United, Travel Guard Group and National Union Fire Insurance Company of Pittsburgh, PA. continue to deceptively advertise and lure consumers into buying AIG travel insurance policies that protect against the same perils the airline did away with—namely cancellation and change fees—in its response to the COVID-19 pandemic last March. 

According to the complaint, the plaintiff and proposed class members have bought travel insurance from the defendants “under false pretenses” given United, in early March 2020, decided to waive change fees and award one-year voluntary cancellation vouchers for all flight tickets purchased before the first quarter of 2021. Per the suit, United subsequently got rid of change fees altogether for the majority of its flights. 

Moreover, the suit claims proposed class members were, from the outset, contractually ineligible to receive trip cancellation and change fee coverage under their travel insurance because their tickets were already refundable under United’s refund policy.

“As a result of their deceptive conduct and illusory promises, Defendants are, and continue to be, unjustly enriched at the expense of their customers,” the case alleges, claiming the defendants’ marketing pitch for the pre-departure coverage “falsely threatens” that consumers will be saddled with cancellation and/or change fees should they fail to buy the trip insurance. 

Per the complaint, Travel Guard Group and National Union Fire Insurance Company—collectively AIG—sell travel insurance through partners such as United Airlines in exchange for kickbacks and advertisement fees. Upon booking tickets online, United’s website represents that AIG provides insurance for a flight refund in the event that a consumer can’t travel for a covered reason, the suit says. 

The plaintiff, a Woodbridge, New Jersey resident, claims he was asked if he wished to buy travel insurance while booking a June 2021 trip to Mexico without being informed that United had waived cancellation and change fees and that he would not be held responsible for such.

“Plaintiff relied on the above representations in that he would not have purchased, or only agreed to pay less for, the Travel Guard insurance, if he was aware that cancellation and/or change fees were already waived by United and that AIG would under no circumstances be responsible to cover such fees in connection with his flights,” the lawsuit reads, noting the man paid $57.06 for trip insurance coverage. 

While United’s pandemic-era refund policy has been in effect, AIG has “never covered, nor paid for, any cancellation-related expenses” and provides “no pre-departure benefits whatsoever,” the complaint asserts. 

“Defendants know these statements are misleading,” the suit contends. “They say them anyway in order to fraudulently induce consumers into purchasing unneeded insurance.”

The lawsuit looks to cover all persons in the United States who bought AIG’s Travel Guard travel insurance on United’s website from March 3, 2020 to the present. 

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