Following the collapse of travel company XL last Friday, which left 21 planes grounded and over 85,000 travellers stranded all over the world, insurers urge holidaymakers to make sure they take out adequate travel insurance when they book their holiday abroad.
After Zoom airlines and holiday firm Seguro folded earlier this month, September has seen almost 278,500 travellers stuck at their holiday destinations and a further 218,500 Brits who were looking forward to their hard-earned break abroad were left with worthless tickets.
Those on a package deal are protected from personal financial losses by ATOL (Air Travel Organisers' Licensing) and those who booked the flights on their credit cards will get a refund thanks to the Consumer Credit Act. People who paid by Visa Debit card have similar rights to who used a credit card, in a so-called chargeback scheme.
However, thousands of consumers who bypassed travel agents and booked their own flights will have lost their money and will have to pay twice in order to get back home. Independent travellers should therefore make sure that they take out a travel insurance
policy before going on their holiday.
"Due to the increased number of consumers arranging their own trips, the number of holidaymakers protected by ATOL has shrunk from 98 per cent in 1998 to less than 61 cent this year," Simon Linstead, Head of Personal Finance at uSwitch commented.
"With this being the third collapse of an airline/holiday firm we have seen this month, consumers should think carefully about the way in which they purchase their holidays or any other big purchases if they want some form of protection."
It is also essential to check that the travel insurance policy includes airline failure, as Chris Price, Head of Travel Insurance at Direct Line points out: "Airline failures are not covered by our travel policies and, as noted by the ABI (Association of British Insurers), most travel insurance policies do not cover these circumstances."
With an extensive range of single trip travel insurance
and annual travel insurance
available, Andy Ledbetter, managing director of insurance at Moneysupermarket.com, advised: "For future holiday plans, it's crucial to get your travel insurance as soon as you have booked your holiday.
"But for the one in seven (14 per cent) British holidaymakers who admit to never taking out travel insurance the 'it-won't-happen-to-me' mentality won't help replenish your wallet if you find yourself out of pocket for events beyond your control.
"Without adequate insurance getting compensation for disrupted travel plans could be incredibly difficult," Mr Ledbetter concluded, "Always check the small print to see what you are and aren't covered for. At a time when consumers are watching every penny, and holidays away are becoming more difficult to afford, it's important to ensure you don't lose out."
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