Travel Insurance Buyers Say AIG Units, United Misled Them

By Eli Flesch
Law360 is providing free access to its coronavirus coverage to make sure all members of the legal community have accurate information in this time of uncertainty and change. Use the form below to sign up for any of our weekly newsletters. Signing up for any of our section newsletters will opt you in to the weekly Coronavirus briefing.

Sign up for our Class Action newsletter

You must correct or enter the following before you can sign up:

Select more newsletters to receive for free [+] Show less [-]

Thank You!

Law360 (May 26, 2021, 8:02 PM EDT) -- United Airlines and two AIG units have been hit with a proposed class action accusing them of misleading customers by advertising and selling travel insurance for fees that United had scrapped in response to the coronavirus pandemic.

William Arce, a would-be traveler to Mexico, told a New Jersey federal court Tuesday that he would have never purchased travel insurance for his flight to Cabo San Lucas if he had known that United had issued a policy to waive flight-change fees and provide vouchers for voluntary cancellations. The AIG units that partnered with United and are named in the suit are Travel Guard Group Inc. and National Union Fire Insurance Co. of Pittsburgh, Pennsylvania.

The suit also takes issue with United's marketing pitch for the insurance, saying it "falsely threatens" customers by warning them that they will be responsible for the fees. Customers who purchased the insurance policies did so under false pretenses, it said.

Arce seeks to represent a national class of customers who purchased their policies through Travel Guard starting on March 3, 2020. Thousands of customers could be included in the class, according to the suit. A search for Travel Guard on United's website currently turns up notices for its travel waivers policy. United also says it is permanently getting rid of change fees for most economy and premium cabin seats.

The suit, however, says that upon booking a flight, customers are required to check a square saying they understand that they may be responsible for certain cancellation fees and delay expenses if they do not opt to pay for the Travel Guard insurance.

"Despite the existence of the refund policy, however, [United and the AIG units] lured [Arce] and class members into purchasing AIG's travel insurance by misrepresenting at the time of booking that coverage was needed to prevent cancellation and/or change fees, although it was not," Arce said in a 17-page complaint.

The suit alleges fraud and misrepresentation of the insurance coverage. United and the insurers broke the law by failing to disclose that the coverage was unnecessary, it said.

With the suit, the AIG units become some of the latest insurers to face class action litigation over pandemic-era travel insurance policies. Earlier this month, Nationwide dodged having to pay out claims to customers after an Ohio federal judge found that stay-at-home orders and advisories weren't quarantines protected by their policies.

And the American unit of Italian trip insurer Assicurazioni Generali Group is fighting 12 lawsuits accusing it of failing to pay for canceled trips. The cases were centralized into multidistrict litigation in New York in December.

A spokesperson for United said the company was aware of the suit, but declined to comment further.

Counsel for Arce did not immediately reply to a request for comment.

A spokesperson for AIG did not immediately reply to a request for comment.

Arce is represented by Yitzchak Kopel of Bursor & Fisher PA, and by Adrian Gucovschi of Gucovschi Law PLLC.

Counsel information for the AIG units and United was not immediately available.

The case is William Arce et al. v. Travel Guard Group Inc. et al., case number 2:21-cv-11741, before the U.S. District Court for the District of New Jersey.

--Additional reporting by Craig Clough. Editing by Haylee Pearl.

For a reprint of this article, please contact

Hello! I'm Law360's automated support bot.

How can I help you today?

For example, you can type:
  • I forgot my password
  • I took a free trial but didn't get a verification email
  • How do I sign up for a newsletter?
Ask a question!