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AA travel insurance closes 'protection loophole'

12 October 2009 / by Andy Davies

A call by the Association of British Travel Agents (ABTA) to close a 'huge loophole' that leaves millions of travellers unprotected if their travel company goes bust has been welcomed by AA travel insurance.

Explaining the loophole, Christian Young, chief executive of AA travel insurance, states that most travellers who book a package holiday "enjoy full protection under the Air Travel Organisers' Licence (ATOL) or similar if a travel firm fails."

However, according to research by the ABTA, of the 45 million overseas trips made last year, only 18 million were package holidays, which Mr Young says could leave people "stranded" without appropriate cover.

Speaking at the Tourism 2023 conference in Barcelona last week, Mark Tanzer, chief executive of ABTA told industry delegates: "ABTA believes that all holidays should be covered, and is working with the Government and the Civil Aviation Authority (CAA) to come forward with a new scheme that allows members to preserve their business model, and yet provide comprehensive protection."

According to Mr Young, more than 50 holiday providers have collapsed in the last year, leaving many people having to pay out more money to get flights home, and for many others ruining their holiday plans altogether.

To combat the existing loophole, AA travel insurance introduced 'financial failure holiday protection' to all of its single trip and annual multi-trip travel insurance policies earlier this year.

Pledging his support to Mark Tanzer's announcement, Mr Young urged travellers to enjoy automatic cover with the AA.

"Each year 27 million people build their own holiday or business travel arrangements by booking each element separately and they may have little or no protection in the event of a company failure. They now automatically enjoy that extra protection with AA travel insurance," he said.

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