Airline failure and travel insurance unpacked

Holidaymakers have been having a bumpy ride over the past month. It started with Ryanair cancelling hundreds of flights and leaving thousands of travellers stranded; then came the collapse of Monarch which left the government with a £60million bill to repatriate Brits left abroad. The problems have highlighted the importance of travel insurance and how it’s essential to read the small print before jetting-off.

When an airline fails (or fails to organise their pilots’ work rota) it’s complicated working-out exactly who’s to blame and whether you can make a claim. Various parcels of protection come from EU legislation, ATOL registration, and even using a credit card to book a break. However, plenty of holidaymakers are still left out of pocket, so surely travel insurance is the solution?

The answer is yes, provided you have got the right type of cover, and the devil is in the detail. The two clauses you need to look out for are ‘scheduled airline failure’ and ‘supplier failure’ and they are much harder to find than you might think.

‘Scheduled airline failure’ is designed to cover travel costs if an airline fails, while ‘supplier failure’ goes a step further to cover knock-on expenses such as cancelled hotels or car hire. While ‘Scheduled airline failure’ is covered by the lion’s share of policies (but not all), ‘supplier failure’ isn’t; and unlucky holidaymakers have been finding out the hard way.

Recent research revealed that seven out of ten travellers mistakenly believed they would be covered for additional costs caused by ‘supplier failure’, when in reality; most won’t. In fact, an investigation by the BBC found that none of the major insurers included knock-on costs in their standard policies.

The good news is that ‘scheduled airline failure’ and ‘supplier failure’ can be purchased as ‘additional cover’ from trusted travel insurance providers such as Quoteline Direct and rates are extremely competitive (you’ll find it under ‘additional cover’ during the online quote process). Choose the right provider and you can get additional cover for the cost of a coffee and a sandwich in the departure lounge.

Holidaymakers have been asking why travel insurance policies don’t automatically include knock-on cover for ‘supplier failure’ and the answer is that holiday booking habits have changed and the insurance industry hasn’t caught-up. Today’s travellers are much more likely to arrange holidays themselves and by sidestepping the travel agent; they could be left exposed. The rise in the number of low cost airlines has inevitably meant that more carriers go bust with over 250 global failures in the past decade.

It’s worth noting that ‘cancellation’ clauses commonly included in travel insurance policies are designed to cover the policyholder if they are unable to make the trip (due to illness, injury or an emergency) rather than the holiday provider.

The headlines also serve as a reminder to ‘buy when you book’ and not just before you fly, or you’ll miss-out on some valuable benefits. If you’re thinking of booking a break we are confident that we can help you find the right cover at the right price, to find out more visit our travel insurance pages or Tel: 0161 874 7745 to speak with a member of our team.


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