Airlines must now give automatic refunds for significant delays. Here's what to know.

What to know about new airline refund rule

What to know about new airline refund rule for delays and changes 01:43

Airlines are now required to give customers automatic refunds, under a new Department of Transportation rule that went into effect this week. 

While the new regulation won't make grappling with flight delays and cancellations less hellish, you are at least guaranteed to get your money back when an airline doesn't transport you from point A to B as promised, without having to file any paperwork. The law is also designed to incentivize airlines to minimize disruptions, Department of Transportation Secretary Pete Buttigieg said Wednesday when the rule went into effect.

"When an airline knows that all — instead of just a few of the passengers on a canceled flight — are likely to actually get their money back, it gives them a different set of reasons to put in the investment, and the realistic scheduling that makes those cancellations less likely to happen to begin with," he said. Flight cancellations this year are already below the traditional average of 2%, indicating the initiative is already having an effect, according to the DOT.

Here's what airline passengers are entitled to under the new rule.

What's a "significant" delay?

For the first time, the new rule sets a standard for what constitutes a "significant change" to a flight. Previously, definitions varied from one carrier to another. A significant change to a flight now includes a three-hour or longer delay for domestic flights, and at least a six-hour delay on international flights. If an airline changes a flight's departure or arrival airport, or adds a connection, that also counts. 

Itinerary changes

Additionally, if a passenger is downgraded to a lower class of service, or to a plane that's less accommodating of passengers with disabilities, they are entitled to an automatic refund, according to the DOT. 

Baggage delays 

Baggage delays are also covered under the new rule. When passengers' checked luggage doesn't arrive within a reasonable amount of time, airlines must refund them any checked bag fees they've paid. However, passengers have to first file a mishandled baggage report with an airline. They are entitled to a refund if their luggage is not delivered within 12 hours of a domestic flight arriving at its gate, or within 15-30 hours of an international flight arriving, depending on its length.

Refunds for nonworking Wi-Fi

If you pay to use an airline's Wi-Fi but it doesn't work, you're entitled to a refund to the cost of the service. Same goes if you paid to select a particular seat but were forced to sit elsewhere. These fees are typically far less substantial than the cost of the flight itself, though. 

DOT's final rule also makes it simple and straightforward for passengers to receive the money they are owed. Without this rule, consumers have to navigate a patchwork of cumbersome processes to request and receive a refund — searching through airline websites to figure out how to make the request, filling out extra "digital paperwork, or at times waiting for hours on the phone," the DOT states on it website. "In addition, passengers would [previously] receive a travel credit or voucher by default from some airlines instead of getting their money back, so they could not use their refund to rebook on another airline when their flight was changed or canceled without navigating a cumbersome request process."

Under the new rule, customer refunds must be issued automatically, without making them jump through hoops. They must also be issued promptly, in cash or to the original form of payment, and in the full amount of the ticket purchase price.