New ATOL Regulations: Gaps in protection mean travel insurance with insolvency cover is still vital for many travellers

By , April 27, 2012 10:28 am
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From Monday 30 April the ATOL Protection Scheme is being extended to cover what is known in the travel industry as Flight Plus Holidays.

We explain what types of holidays will now be protected by ATOL, what types of holiday are still unprotected and why travel insurance with insolvency cover or scheduled airline failure cover is still important for many travellers.

Is your holiday protected or do you need travel insurance with insolvency cover?

Find out if your holiday is ATOL Protected

If your holiday is ATOL Protected the CAA (Civil Aviation Authority) will ensure that you can claim your money back, or get home safely in the event of the insolvency of an airline or holiday supplier.

See our quick check diagram to see whether your holiday will be protected or whether you need travel insurance with insolvency cover/scheduled airline failure cover.

Find out if your holiday is protected >>  (Updated with new ATOL Flight Plus)

 

ATOL Protection extended to cover Flight Plus Holidays

From April 30, the Government is extending the ATOL Protection Scheme to include what is sometimes known as a Flight Plus holiday or Dynamic Packaging.

This means if you book a flight plus accommodation, or a flight plus car hire abroad from a high street or online retailer, your booking will be ATOL Protected.

Under the previous ATOL regulations holidays where a flight and hotel were chosen and priced separately, even if they were booked through a single company, were not covered. Under the new rules this type of holiday will get the same kind of protection as a traditional package holiday – Great news for holiday makers.

From October 2012 you should receive a certificate to confirm that your booking is ATOL Protected. (The travel industry has been given until October to start issuing certificates because of the amount of work involved in updating their systems to be able to do this).

The extension to ATOL Protection is good news, however there are still some big gaps in the legislation which means many holidays will still not be protected by ATOL.

Holidays and Flights Sold by Airlines are still not protected.

There is one important omission from the new regulations, and that is that holidays and flights sold by airlines, which remain unprotected.

You don’t get the same level of protection if you book a flight and hotel ‘package’ direct through an airline, as you would choosing the same flights and hotel via a third party such as an online or high street travel agent.

The extending of the ATOL Protection Scheme to Flight Plus and Dynamic Packaging holidays is a significant step forward in bringing ATOL up to date and in line with our changing ways of booking holidays. However extending it further to include holidays sold by airlines is essential if UK holiday makers are to get clear and fair financial protection for their holidays.

Although the Government has stated that it is committed to extending ATOL Licensing to include holidays sold by airlines, it would require a change in the law so is not included in the latest set of reforms.

Travel Insurance with Insolvency Cover is still vital for many travellers

So the question is, with the extension of the ATOL Scheme is there still a need for Travel Insurance with Insolvency Cover?

The simple answer to that is yes, definitely. Travel insurance with insolvency cover or scheduled airline failure plugs the gaps that still remain in the financial protection provided by the ATOL Scheme.

For instance, holidays or flights sold by an airline will still be excluded from the ATOL scheme, so if you book a flight and hotel from an airline rather than from a high street or online retailer your holiday would not be financially protected.

Also if you were to book flights and accommodation separately through 2 completely separate companies, your holiday would not be protected under the new ATOL rules because you have not booked the flight and accommodation from the same supplier.

In these instances your holiday would not be ATOL Protected and travel insurance with cover for insolvency can provide the financial protection you need to protect the money you have invested in your holiday.

In short the Government’s reforms extend the ATOL Scheme to protect more holidays than it did before, however it still only provides protection for if you book your flights and accommodation or flights and car hire from the same company, and it still excludes flights or holidays sold by an airline completely.

This means there are still many instances where travel insurance with insolvency cover is a good option to provide cover against the risk of your airline or holiday supplier becoming insolvent.

Some travel insurance include insolvency cover (scheduled airline failure) as standard, others offer it as an additional option that can be added to your travel insurance policy.

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