The Department of Transportation has issued a new rule requiring airlines to give you an automatic refund if your flight is canceled or delayed or if they lose your bags

The Department of Transportation has issued a new rule requiring airlines to give you an automatic refund if your flight is canceled or delayed or if they lose your bags.

"Passengers should receive refunds promptly and hassle-free when airlines owe them," stated US Transportation Secretary Pete Buttigieg.

Under the Department of Transportation's (DOT) new rule, passengers are eligible for a full refund if their flight is canceled or significantly altered, provided they decline alternative travel options or travel credits offered.

A "significant change" is defined by the department as flight departure or arrival times altered by more than 3 hours domestically and 6 hours internationally, departures or arrivals from different airports, increased connections, downgrades to lower classes, altered connections at distant airports, or flights on less accessible aircraft for passengers with disabilities.

Previously, airlines had the discretion to define what constituted a "significant change," often leading to passenger frustration and refund denials.

The new rules also cover tickets purchased through travel agents and third-party sites like Expedia and Travelocity, as reported by ABC News.

Refunds are not limited to canceled flights. Airlines must also refund passengers for additional services like WiFi, seat selection, or in-flight entertainment if these services are not provided as promised.

According to the DOT, airlines and ticket agents are required to issue refunds within seven business days for credit card purchases and 20 calendar days for other payment methods. Full refunds must include government and airline-imposed taxes and fees.

Passengers experiencing delays due to checked baggage issues, such as lost or mishandled luggage, are entitled to a full refund of their checked bag fee if the luggage does not arrive within 12 hours of a domestic flight or 15-30 hours of an international flight, with the refund amount varying based on the flight duration.