Holidaymakers are being urged to take out appropriate travel insurance before taking a break to ensure they are not a victim of holiday firms collapsing.
While many travel agents provide holidaymakers with Air Travel Organisers' Licence protection or similar when package holidays are booked, many people do not get this protection because they choose not to book package holidays.
According to AA Travel Insurance, more people are booking flights, hotels and car hire separately because it can be done simply online.
However, without protection like ATOL holidaymakers are at risk of having pay extra for flights if a company goes bust or not getting refund on a cancelled holiday.
AA Travel Insurance automatically covers travellers for financial loss if the firm they book with goes in to administration.
Commenting on the news, Christian Young, CEO of AA Travel Insurance, said: “Many travellers believe they are fully protected when taking a holiday, either through their insurance, credit card or travel compensation schemes.
“But the truth is that cover is often incomplete, patchy and the claims process can be long-winded.”
However, Mr Young added that people should not be deterred from going on holiday this year as there are many good deals about, he said: “Holiday companies are being left with thousands of unsold flights and hotels throughout the world that can be booked at bargain prices.
“If you buy a package through an agent bonded by ATOL, ABTA or similar you will have protection,” he adds.
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© Fair Investment Company Ltd