Guide to holiday protection insurance
It’s not unheard of for a holiday company to go bust and with the travel industry taking a huge blow during the pandemic, it’s probably safe to say that the future is a little uncertain.
But where does that leave you when you’re booking a holiday and what can you do about it?
Key points
- Always make sure your package holiday is ATOL or ABTA protected
- The right travel insurance can offer you protection if your holiday isn’t a package deal
- Buy travel insurance as soon as you book your holiday to cover you until your departure date
- AITO and TTA require their members to protect customers’ money, so they won’t lose out if the company ceases trading
What is holiday protection insurance?
We all count down the days until our next holiday. So when something gets in the way of enjoying our getaway, it can be very stressful and upsetting, especially if you’ve spent a lot of money.
Luckily, there’s protection available that can step in if the travel company goes bust in the form of ABTA and ATOL protection for packaged holidays, or travel insurance if you’re arranging the trip yourself.
Make sure your policy has the cover you need, so you can relax and focus on packing your suitcase.
Do I need holiday protection insurance?
After not being able to travel over the past couple of years, booking that perfect holiday has never seemed so important. So, you don’t want anything to spoil it.
Holiday protection insurance can give you peace of mind that if something were to happen - for instance, if the tour operator ceased trading - you’d be reimbursed, or returned safely back to the UK if it collapses while you’re abroad.
Holiday protection for packaged holidays
A packaged holiday is typically one that:
- You bought for an inclusive price (no separate prices listed)
- You bought more than one part of the holiday from one company for one payment, like coach tickets and accommodation, or flights, car hire and accommodation
- Is advertised as a package or all-inclusive deal
- Is ATOL or ABTA protected
- You booked and paid for part of the holiday and then were asked to purchase a further part of your holiday within 24 hours of the first booking without having to re-enter your personal or payment details
Alternatively, you may have a Linked Travel Arrangement, which is when you book a part of your holiday and then are prompted to purchase another part within 24 hours, but your details aren’t transferred.
If this is the case, you will still have protection if the company goes bust, but not the full level of cover that you would with an ATOL or ABTA registered holiday, which includes protection if your holiday has not been accurately advertised.
ATOL
ATOL is run by the Civil Aviation Authority (CAA). It’s a scheme which protects holidays booked through a tour company or travel agent that includes a flight. All UK travel companies that sell flights must have an ATOL licence.
If a company ceases trading and cancels holidays or leaves customers overseas with no return flights, ATOL will issue refunds or make sure customers are able to get back home.
You can look for the ATOL logo when booking your holiday, or enquire with the company if you can’t find it.
ABTA
ABTA provides protection if you’ve bought a holiday that doesn’t include a flight, for instance, a cruise, coach or train trip.
Like ATOL protection, you could receive a refund if the holiday company stops trading, or your return journey will be organised if you’re stranded abroad. ABTA also has a Code of Conduct that its members must adhere to, which includes advertising holidays accurately and managing complaints fairly.
Check that the tour company or travel agent is ATOL protected on their website.
Non-packaged holidays
To be ATOL or ABTA protected, you must book all the parts of your holiday together through the same company - for example, accommodation and transport. If this isn’t the case, you won’t have this type of cover.
However, travel insurance can step in to save the day. The right policy can provide cover for:
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Cancelled holidays
If you aren’t able to go on your holiday because of a reason outlined in the policy documents. This could include a travel companion or family member dying, being called up for jury service, or if you’re made redundant before the start of your trip
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Delayed flights
A significant delay in your flights could entitle you to claim costs from your insurer. How long the delay must be before you can claim will differ between insurers, but typically it’s around 8-12 hours
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Missed flights
Your policy could include cover for missing a flight through no fault of your own. This could be because your car broke down on the way to your departure or there were long delays in public transport. Check what is excluded in the policy details
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Consequential loss
If your flight is significantly delayed or cancelled and this affects the rest of your holiday leaving you out of pocket, you may be able to reclaim costs. For example, if you put your dog into kennels and your flight is cancelled, you may be reimbursed
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Supplier failure and scheduled airline failure
Supplier failure cover steps in if your hotel or travel company ceases trading, while scheduled airline failure covers you if the airline goes under. You may need to find a more comprehensive policy if you want this included
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Medical treatment
All travel insurance policies will have cover for medical emergencies up to a certain limit. If you need a higher level of cover, your policy will cost more and if you have pre-existing conditions, your premium will likely be more expensive
Credit card protection
It could be wise to pay for the different components of your holiday using your credit card if you’re going down the non-package holiday route. Under section 75 of the Consumer Credit Act, purchases between £100 and £30,000 are protected if the service, or product, isn’t delivered or is faulty.
This means your credit card provider is jointly liable for the costs. So, if the airline goes under, you could claim the costs back from your card provider if you’re having no luck getting a refund.
Am I covered with AITO and TTA?
AITO stands for the Association of Independent Tour operators and it’s a travel industry trade group. Members of AITO are required to protect money paid by the customer and report the details of how they do this to AITO at regular intervals. It also ensures that its members use accurate advertising and promote responsible tourism.
TTA stands for the Travel Trust Association, which puts the money you pay any of its members into a trust account. This is then guaranteed by the TTA’s Travel Protection Plan, so you know your money is safe.
Both these associations require their members to uphold strict standards and test them periodically to make sure they’re keeping to them.
Visa requirements and government advice
Travelling against government advice will almost certainly void your travel insurance policy. You can check the travel status of a country by checking the Foreign, Commonwealth & Development Office website.
It’s also up to you to find out the visa requirements of the country/countries you’re visiting. If you have the incorrect visa and are unable to enter, you won’t receive any compensation from your travel insurance.
When should I buy travel insurance?
It’s important to purchase travel insurance as soon as you’ve booked your holiday. This means you have cover in place if something happens between booking and the departure date that means you’re unable to travel.
You can’t purchase it retrospectively, so if, for example, there’s a death in the family the week before and you’re unable to go on holiday, you’ll lose out on all your money.