Many UK policies carry a clause deducting airline compensation from a delay claim. In Financial Ombudsman decision DRN5164096, read 15 September 2026, each passenger had £221.24 from the airline and the insurer still had to reassess a refused £160 car hire cost, because the two were separate losses.
It can try, and the clause that lets it try is already in the wording you own. It does not always work. In Financial Ombudsman Service decision DRN5164096, read on 15 September 2026, an insurer refused a car hire cost outright because the airline had already paid more than that cost in delay compensation. The ombudsman made it reassess the claim.
The facts are ordinary, which is the point. A family flew to Europe with a hire car booked at the destination airport. The flight ran about eight hours late, the hire desk logged the booking as a no show, and a replacement contract cost 185 euros, about £160. The airline paid £221.24 to the passenger and to each member of his family under the EU regulation on delayed flights. The insurer compared the two numbers, saw £221.24 was the larger, and declined.
Ombudsman Nicola Sisk upheld the complaint and required U K Insurance Limited to reassess the claim in line with the remaining policy terms, limits and excess. Her reason was not that the clause was badly drafted. She accepted the term was clear. The reason was that the two payments were, in her words, separate issues, compensation for the delay and the financial loss of the car hire expense.
Every page that answers this question tells you to check your policy wording. None of them tells you what you are looking for. It is two sentences, rarely in the section you expect, and much easier to find once you know its shape.
The term the insurer relied on sat under the travel delay section, headed claims settlement, and the decision reproduces it in full. The same mechanism appears in live consumer products in more than one place at once, which is exactly why searching for a single phrase misses it.
Read those rows together and the structure is plain. One clause turns pursuing the airline into a duty you owe the insurer, a second deducts whatever you recover from whatever it pays, and a third, in the cancellation section rather than the delay section, excludes costs recoverable from the transport provider, its booking agents, a compensation scheme or your card provider. The Financial Ombudsman Service puts the same principle to consumers on its own travel insurance page, most travel insurance policies do not cover claims if the losses can be recovered from another source.
None of this is hidden or unusual. It is simply never the thing anyone tells you to compare. Our own travel insurance guide lists six things to check before buying, in order, and this clause is not one of the six.
| Document | Where it sits | Wording as published |
|---|---|---|
| U K Insurance travel insurance, quoted in DRN5164096 | Travel delay, claims settlement | You must seek recompense from the operator where you should be entitled to compensation (e.g. due to EU Passenger Rights). Any amount you can recover will be deducted from any claim we pay. |
| AA travel insurance policy wording, July 2021 | Travel disruption, special conditions relating to claims, item 1 | You must seek financial compensation, assistance or a refund of your costs from your travel provider and invoke your rights under EU Air Passenger Rights legislation in the event of cancellation or delay of flights if applicable. |
| AA travel insurance policy wording, July 2021 | Cancelling or cutting short, what is not covered, item 11(b) | Any unused or additional costs incurred by you which are recoverable from the providers of the transportation, their booking agents, travel agent, compensation scheme or Air Travel Organisers' Licensing (ATOL). |
Because clear and fair are two different tests, and the ombudsman applies the second one. The decision records both findings in the same breath, that the term is clear, and that it was not fair or reasonable to apply it in the circumstances of this case.
The reasoning then works through the regulation rather than the contract. For a delay of that length the airline owed two distinct things, a compensation payment for the disruption based on delay time, and care and assistance while waiting. The ombudsman took the definition of care and assistance from the Civil Aviation Authority, food, drink, access to communication, accommodation and travel to that accommodation. A replacement car hire contract is on neither list.
That is the whole of it. The regulation does not pay for the car hire, the ombudsman saw no evidence the passenger could recover it anywhere else, and a clause written to stop you being paid twice for one loss cannot stop you being paid once. Comparing £221.24 against £160 only makes sense if both numbers describe the same loss.
Worth noting what the policy would have paid. The delay section covered up to £1,000 each insured person after the first four hours of delay, for additional expenses including travel. This was not a fixed benefit paid by the hour. It was an indemnity limit against receipts, which is the harder case, and the one the live pages on this question skip.
| The payment | What it was for | Basis |
|---|---|---|
| £221.24, per passenger, paid | The delay itself, a flat sum tied to no receipt | EU regulation on delayed flights |
| 185 euros, about £160, refused | A replacement car hire contract after the desk logged a no show | Travel delay cover, up to £1,000 each insured person after four hours |
Often, and the honest limits here matter more than the headline. This decision is not a licence to claim the same thing twice.
The overlap is real wherever the airline duty of care and your policy point at the same receipt. Care and assistance, on the list the ombudsman took from the Civil Aviation Authority, means food, drink, access to communication, accommodation and travel to that accommodation. If the airline reimburses your accommodation and you then send the same invoice to your insurer, that is one loss with two claimants attached, and the deduction clause does exactly what it says on the page. The same holds for any cost the airline has already paid back to you, a replacement ticket included.
Two further limits are worth stating plainly. An ombudsman decision binds nobody beyond the parties and those facts, because the test is what is fair in the circumstances of the case, not precedent. And a finding that a term is clear is one the insurer can rely on next time, against a different expense.
What it gives you is an argument that has worked once, in public, against a named insurer. Where the regulation never covered your cost, the clause is being used to turn a payment for inconvenience into a credit against a receipt. That is the move the ombudsman refused.
The clause is not a reason to skip cover. It is a reason to know, before a delay rather than during one, which of your costs a policy will treat as already recovered. One pass through the PDF settles it.
Compare cover before you flyRead the delay section and the general exclusions before you buy, not after a claim is refused.
Airline first, insurer second, in writing both times. That order is what the clause requires of you in any case, and it produces the paper trail the insurer will ask for.
Claim from the operating carrier for the compensation and for any care and assistance it failed to provide. Our EU261 guide sets out the amounts, the notice periods and the two-limb test carriers use to refuse. The Financial Ombudsman Service also tells consumers to ask the airline to confirm in writing why it will not compensate, which is the document that makes the rest of this easy. Then take to your insurer only what the regulation does not reach, itemised, with the airline decision attached.
If the insurer applies the clause to a cost the regulation never covered, answer in those terms. Name the cost, show it is neither compensation nor care and assistance, and ask for the clause to be read against that loss rather than your total recovery. If the insurer holds its position, the formal complaint to the insurer runs first, and the Financial Ombudsman Service takes the case free once you have its final response, or once eight weeks have passed without one.
If you would rather not run the airline claim yourself, a claims company will, and what a claims company keeps is worth knowing before you sign. Every figure on this page was read from a public document on the date shown, and our method explains how that works.
Usually yes, for different things. The airline pays a flat sum for the delay itself, your policy reimburses documented costs. In decision DRN5164096 the ombudsman treated them as separate issues and made the insurer reassess a car hire cost the airline compensation did not cover. What you cannot do is claim one receipt twice.
Sometimes. Most policies carry a term deducting anything you recover elsewhere, and the ombudsman accepted in DRN5164096 that the wording was clear. It still refused to let the insurer apply it, because the refused cost was a replacement car hire the EU regulation does not pay for. The test is whether both payments cover the same loss.
Yes. Policies commonly make pursuing the airline a condition of the claim, not a suggestion, and the AA wording asks you to invoke your rights under EU Air Passenger Rights legislation. Declare what the airline paid and what it paid it for. Hiding a recovery risks the whole claim, while itemising it is what makes the separate loss argument work.
Being paid twice for one loss. If the airline refunds your hotel night under its duty of care and you then claim the same invoice on insurance, that is double recovery and the deduction clause applies. A flat compensation payment for the delay is not earmarked against any receipt, so it does not by itself make a separate expense a second recovery.
In two places. Under the travel delay or disruption section, often headed claims settlement or special conditions relating to claims, and again in a what is not covered list as a line removing costs recoverable from the transport provider, its booking agents, a compensation scheme or your card provider. Search the PDF for recompense, recoverable and Passenger Rights rather than reading the delay pages end to end.
No. Decisions bind the parties to that complaint, not the market, because the ombudsman decides what is fair and reasonable in the circumstances of each case. DRN5164096 is useful as an argument and as an example of one insurer losing, not as a rule. Your own policy wording and your own facts still decide the outcome.