Posts tagged: travel insurance infographic

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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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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Travel insurance changes to match our travel habits

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By , September 1, 2011 10:36 am
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Our travel insurance timeline illustrates how our holiday habits have changed and how travel insurance has adapted in response.

travel insurance and holiday timeline

Our holiday timeline illustrates key events in the changing face of the UK holiday and travel insurance market.

The holidays we take have certainly changed since the young men of the British Nobility took their Grand Tour of Europe in the 1700s and 1800s.

Thomas Cook was the first pioneer to open up travel to a wider audience in the 19th century. He offered his first package tour in 1841, it was a return day trip between Leicester and Loughborough, taking advantage of the railways which were spreading across Britain at the time. Thomas Cook’s first package tour to Europe took place in 1855.
The next big event in the travel industry was in the 1950’s when the Horizon Group pioneered the first mass package holidays from Gatwick.

As our travel habits have changed, the travel insurance we need to protect ourselves when we go on holiday as changed along with. The travel insurance cover itself has changed along with the way we buy it.

See our travel insurance timeline for an illustration of key events in the changing face of the UK holiday and travel insurance market.

The first travel insurance policy was sold in 1864 in the USA by the Travellers Insurance Company; there have been some big changes since then.

Until the mid-20th Century, travel insurance was seen as an addition to Personal Accident Cover and the majority was sold by Lloyds of London. Very few standalone travel insurance policies were sold.

The advent of the package holiday in the 1950s and rapid expansion of the travel industry generated a sharp rise in travel insurance sales. By the 1960s the majority of travel insurance was sold by Tour Operators, alongside the purchase of a package holiday.

In 1960 travel insurance cover for 2 weeks in Europe cost about £1.

In 1978, as a response to Air Traffic Controller strikes the previous year, travel insurers introduced the first travel insurance cover for industrial action, it was designed to cover delays due to strike at airports.

As a result of the huge growth in travel to the USA, where medical costs are significantly higher than in Europe, medical expenses cover on many travel insurance policies increased from £500 to £50,000.

By the mid-80s the majority of travel insurance policies were sold through travel agents.
Typical cost of travel insurance from a travel agent in the late 1990s for 1 adult 1 week in Europe is £20.

We then jump to the 21st Century for some significant changes to travel insurance, which were driven by the internet and increased independent travel. By the early 2000’s Annual Travel Insurance has grown in popularity as holiday makers start to take more than one holiday a year. This is driven by the launch of low cost airlines and the rise of online booking.

In 2005 the Financial Services Authority starts to regulate travel insurance intermediaries. Travel insurance sold alongside a holiday is exempt from FSA regulation and ABTA introduces an insurance exam to ensure travel agents are selling travel insurance correctly.

In 2006 Scheduled Airline Failure cover is introduced to provide extra cover for the increasing number of holiday makers booking holidays independently, rather than through a bonded tour operator or travel agent. It provides travel insurance protection to cover the insolvency of a holiday supplier, such as an airline or hotel.

Sales of travel insurance, direct from a new breed of online provider, grows alongside sales of independent holidays.

Typical cost of travel insurance for 1 week in Europe is £10

By 2007 price comparison sites such as moneysupermarket.com are starting to dominate the travel insurance market with travel insurance for 1 week in Europe costing as little as £5.

As a result of the Volcanic Ash Crisis in April 2010, which caused the closure of most of UK air space for nearly a week, travel insurers introduce Natural Catastrophe Cover. Natural Catastrophe cover is designed to cover cancelation and delay due to natural disasters, such as volcanic eruptions, earthquakes and floods.

Things have certainly changed since Thomas Cook’s day, see our travel insurance timeline and holiday timeline for a great graphical illustration of the key events in the history of travel insurance and package holidays.

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