Category: Travel Insurance & Insolvency Cover

Another airline insolvency highlights the need for travel insurance insolvency cover

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By , May 4, 2012 11:19 am
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Danish no-frills airline Cimber Sterling declared bankruptcy on Thursday after its owners pulled financial support from the company.  The notice stated that passenger’s tickets are now worthless and all future flights have been cancelled.

The insolvency of another airline highlights the need for financial protection against the insolvency of airlines and other holiday suppliers, especially in these times of recession and uncertainty. We invest a lot of money in our holidays, so it’s important to make sure that our money is protected.

Travellers booked to travel with Cimber Sterling who bought travel insurance with insolvency cover or scheduled airline failure included should be able to make a claim on their travel insurance policy to recoup the cost of their lost ticket, although they will still need to arrange alternative flights to complete their journey.

Unfortunately the extension of ATOL Protection which came into force on Monday would be unlikely to protect passengers in this instance as passengers on low cost airlines tend to book direct their tickets with the airline rather than via a third party retailer.

Flights and holidays booked direct with airlines still fall outside of the ATOL Protection scheme, which means that your money is unprotected against the insolvency of the airline unless you buy travel insurance with insolvency cover or scheduled airline failure.

To find out more about protecting your holiday read our posts about travel insurance and insolvency cover.

Is your holiday protected for insolvency? Find out using our quick check infographic

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

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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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ATOL Extended to Protect more Holidays: Is your Holiday Protected?

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By , April 27, 2012 10:09 am
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Use our quick check diagram to see whether your holiday is protected or whether you should consider buying travel insurance with insolvency cover.

From Monday (April 30 2012) the Government is extending the ATOL Protection Scheme to include what is sometimes known as a Flight Plus holiday or Dynamic Packaging.

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.

Find out if your holiday is protected or if you need travel insurance with insolvency cover

Find out if your holiday is protected or if you need travel insurance with insolvency cover

 

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Consumers confused by Holiday Protection, ATOL and Travel Insurance

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By , March 15, 2012 5:48 pm
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A survey has shown that consumers don’t understand if or how their holidays are protected against insolvency.

When you book a holiday it could be protected against insolvency by the ATOL Scheme, by credit card if you used it to book the holiday, by your travel insurance or not protected at all.

travel insurance

Travel insurance can provide insolvency cover

It’s important to know how your holiday is protected against insolvency, if you don’t know you could find yourself losing out if your holiday supplier stops trading and doesn’t fulfil your booking.

The survey conducted by Explore Research on behalf of Travel Weekly highlighted the amount of confusion which exists with regards to financial protection, holidays and travel insurance. Despite the fact that most respondents thought financial protection was important, few understood if or how their holiday was protected in the event of supplier insolvency.

The survey showed that 96% of UK adults considered financial protection ‘extremely important’ or ‘very important’ when booking an overseas holiday, yet only 52% actively considered what financial protection would be in place for their holiday when they made a booking.

When asked how they thought holidays were protected against insolvency, 70% said by travel insurance and only 42% mentioned ATOL.

This figure highlights the confusion that exists with regards to financial protection for holidays and how consumer’s money could be at risk because of it.

70% of people surveyed thought that travel insurance would provide cover in the event of insolvency, and although it is possible it is not always the case and travellers should check whether their travel insurance provides cover for insolvency before relying on it.

Traditionally travel insurance did not provide cover for insolvency because the majority of holidays were booked as a package via an ATOL bonded tour operator. This meant that holidays were ATOL Protected and the CAA (Civil Aviation Authority) would ensure that holiday makers could claim their money back, or get home safely in the event of insolvency.  So there was no need for travel insurance to provide cover for the insolvency of a holiday supplier.

Of course, these days, with low cost airlines and the internet, the way we book our holidays has changed dramatically and a large percentage of holidays booked are not protected by ATOL or the CAA.

Travel insurance can and does provide cover for insolvency, often called Scheduled Airline Failure or Dynamic Packaging cover, but you need to check. Some travel insurance policies include it as standard, some travel insurance policies have the option of adding insolvency cover at an additional price and some travel insurance policies don’t offer insolvency cover at all.

The lesson is; if you are not booking an ATOL bonded holiday, don’t just assume that your travel insurance will provide cover for insolvency, spend a bit of time choosing your travel insurance and buy a travel insurance policy that can provide the extra insolvency protection you need.

Which holidays are ATOL bonded?

The level of financial protection you have for your holiday if a supplier becomes insolvent depends largely on how you booked it, which in turn means that how you booked your holiday will also have an impact on what level of travel insurance cover you should buy. Travel insurance cover for insolvency can be called a number of different things, from something simple like ‘Insolvency Cover’ to ‘Scheduled Airline Failure’, which isn’t usually limited to the insolvency of airlines as the name suggests, or Dynamic Packaging Cover which probably means very little to anyone outside of the insurance or travel industry.

Quick check diagram - do you need insolvency cover with your travel insurance?

At the moment, the basic rule is, if your holiday was sold as a package including flights, advertised at one inclusive price then it should be ATOL Protected, if you have booked or chosen elements of your holiday separately, even if they were booked through the same company they are unlikely to be protected by ATOL and you should make sure your travel insurance provides cover for insolvency.

Find out whether your holiday is protected >>

The Government is changing ATOL to protect more holidays, read our post to find
out how the rules are changing and which holidays will remain unprotected
.

 

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Financial protection for air holidays is to be extended: Is there still a need for travel insurance with insolvency cover?

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By , February 16, 2012 11:42 am
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Article Summary: We’re discussing what the ATOL reforms mean in practice for UK holiday makers and whether there is still any need to buy travel insurance with insolvency cover.

The Government is reforming the ATOL (Air Travel Operators License) Protection Scheme with effect from April this year. This is great news for travellers as it will mean more holidays are financially protected and it makes the whole system clearer and easier to understand.

The level of financial protection you have for your holiday if a supplier becomes insolvent depends largely on how you booked it, which in turn means that how you booked your holiday will also have an impact on what level of travel insurance cover you should buy. Travel insurance cover for insolvency can be called a number of different things, from something simple like ‘Insolvency Cover’ to ‘Scheduled Airline Failure’, which isn’t usually limited to the insolvency of airlines as the name suggests, or Dynamic Packaging Cover which probably means very little to anyone outside of the insurance or travel industry.

Quick check diagram - do you need insolvency cover with your travel insurance? This diagram reflects the current situation and will be updated once the reforms come into effect

Read our previous post for more information about the current financial protection available for your holiday and how that effects the travel insurance need.
Note:This will change from April 30 2012.

ATOL Protection extended to cover Flight Plus Holidays from April 30

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 that from April 30, 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 current ATOL regulations holidays that included a flight and hotel that were chosen and priced separately, even if they were booked through a single company, were not covered. Under the new rules which come in to effect in April this type of holiday will get the same kind of protection as a traditional package holiday. Great news for holiday makers.

The financial protection that the license brings will add a £2.50 per person ATOL Protection Contribution (APC) to the cost of your booking. And from October 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).

Aviation Minister Theresa Villiers said

“It is essential the scheme should apply in an effective way in the modern holiday market; so that consumers are clear about their rights and how to use them, and holiday companies know which of their products must be protected.

“In addition the Air Travel Trust Fund needs to return to a financially self-sustaining basis as soon as possible so that taxpayers’ money is no longer exposed to risk. We expect these reforms should allow the ATOL scheme’s financial deficit to be repaid within three years. This will pave the way for possible future changes to improve how the scheme is funded and managed.”

Holidays and Flights Sold by Airlines will still be Excluded from ATOL

There is one important omission from the new regulations, and that is that holidays and flights sold by airlines. You won’t get the same level of protection if you book a flight and hotel ‘package’ direct through an airline, such as Easyjet or British Airways, as you would choosing the same flights and hotel via a third party such as Lastminute.com or a 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.

Is There Still a Need for Travel Insurance with Insolvency Cover?

So the question is, with the extension of the ATOL Scheme coming in to force in April, will there still be a need for Travel Insurance with Insolvency Cover?

The simple answer to that is yes, definitely.
Travel insurance with insolvency cover will still be able to plug a gap 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, for example booking your flights with Expedia and your hotel through Lastminute.com, your holiday would not be protected under the new ATOL rules because you have not booked the flight and accommodation together.

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

In short the Government’s reforms will 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 campany, 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.

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Thomas Cook shares drop by 75% as it seeks further funding

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By , November 22, 2011 3:18 pm
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As the travel industry struggles, do you need travel insurance with insolvency cover?

Travel insurance cover with insolvency cover is becoming
increasingly important as holiday makers continue to look for cheaper holidays
by putting together their own packages and travel companies experience tough
trading conditions.

travel insurance with insolvency cover

Thomas Cook Airlines G-CRPH

The news that Thomas Cook shares have gone into free fall this morning as it talks with banks to secure further loans to see it through to the end of the year, highlights the importance of checking what financial protection you have in place for your holiday.

I’ll stress at this point that Thomas Cook continue to trade as normal, but the fact that they are seeking to increase their borrowings in order to continue trading during the quiet winter months, is a stark illustration of the tough trading conditions that travel companies and airlines are facing at the moment.

The ATOL website is currently listing 24 travel companies which have become insolvent this year, and this morning it has been announced that Astraeus Airlines has gone into administration.

Against a background of tough trading conditions in the travel industry it is more important than ever for holidaymakers to check what financial protection they have when they book a holiday.

Anyone who has booked for a package holiday with Thomas Cook would be covered under the Air Travel Organisers’ Licensing (ATOL) scheme, which is funded by contributions from travel companies. This would be the same for any package holiday including air travel which is booked through a bonded tour operator.

However, people who have only booked a flight only direct with a flight company or airline, such as FlyThomasCook.com will not be covered by the ATOL scheme and should ensure that they buy suitable travel insurance that includes insolvency cover.

What is travel insurance with insolvency cover?

The level of financial protection you have for your holiday if a supplier becomes insolvent depends largely on how you booked it, which in turn means that how you booked your holiday will also have an impact on what level of travel insurance cover you should buy.

See our quick check diagram to see if your holiday is financially protected. Do you need travel insurance with insolvency cover?

Travel insurance with insolvency cover can provide the extra financial protection you need if you book your holiday independently. This type of travel insurance insolvency cover is often called Scheduled Airline Failure or Dynamic Packaging Cover – Some
companies will include it in their standard travel insurance policy, and some travel insurance providers have it available as an optional extra.

Check out our easy diagram to see whether your holiday is protected or you should consider buying travel insurance with insolvency cover.

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19 travel firms have become insolvent this year: Is your holiday safe?

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By , October 21, 2011 2:28 pm
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If you haven’t booked a traditional package holiday, travel insurance with insolvency cover can provide the extra protection you need if your travel suppliers becomes insolvent.

The level of financial protection you have for your holiday if a supplier becomes insolvent depends largely on how you booked it, which in turn means that how you booked your holiday will also have an impact on what level of travel insurance cover you should buy.

See our quick check diagram to see if your holiday is financially protected or if you need travel insurance with insolvency cover

Last week saw the collapse of the 19th tour operator this year, with Twickenham based Geo-Dive going into administration. The travel industry is going through a tough time at the moment as holiday makers tighten their belts in the face of rising inflation and there are fears of further failures in the coming months.

According to corporate administrator Begbies Traynor, there are a growing proportion of UK travel companies in serious financial distress. The company’s ‘Red Flag Alert’ report for Q3 2011 warns that the number of travel and tourism businesses facing ‘critical distress’ has risen 49% in the past year, and that insolvencies are “inevitable”.

In the light of this news, it’s important to know what protection you have for your holiday in the event that one of travel suppliers cease trading, either before you travel or whilst you are away.

Under the current ATOL (air travel operator’s license) regulations, your holiday is only financially protected by law if it is bought as a traditional package.

If you book elements of your holiday separately, direct with different suppliers, they will not be protected under the ATOL scheme.

Travel insurance with insolvency cover can provide the extra financial protection you need if you book your holiday independently. This type of insolvency cover is often called Scheduled Airline Failure or Dynamic Packaging Cover – Some companies will include it in their standard travel insurance policy, and some travel insurance
providers have it available as an optional extra.

Check out our easy diagram to see whether your holiday is protected or you should consider buying travel insurance with insolvency cover.

Is your holiday protected: Do you need travel insurance with insolvency cover?

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