Thursday, October 21, 2021

Does Travel Insurance Cover If Company Goes Bust

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Package Holidays Incl A Flight Booked With A Uk

If you’ve booked a package including a flight with a UK-registered firm, you should be covered by ATOL. Double-check that’s the case. If it is, the step-by-step help below is for you. If it’s not, you’ll need to see the other options.

ATOL ensures you don’t lose out financially if a travel firm you’ve booked with goes bust. This could mean refunding the holiday’s cost, or reimbursing you for alternative arrangements you had to make if you were away at the time.

What to do if you’re still in the UK

A hotel or airline going bust doesn’t always result in a ruined holiday.

If the airline, hotel, hire firms or other service provider has gone bust… then the tour operator if you’ve used one should find you an alternative flight/room/etc or give you a full refund for the holiday.

But even if all seems OK, check with ATOL in case it has any additional information.

If you booked via a travel agent and there is no tour operator then check with your agent what is happening under travel agent protection, it should ensure you can continue your holiday as planned or get a refund.

If the tour operator has gone bust, check with ATOL. See its list of failed providers which should include what to do, as your firm should be on there.

It may be able to find another operator to take over your trip if elements such as your hotel haven’t been paid, but this is rare and not guaranteed.

  • If your holiday is still on… great. Enjoy the beach, slopes, city or whatever else you’re doing.
  • How To Check If Your Travel Insurance Covers For The Collapse Of Travel Companies

    Not all travel insurance policies will cover you for the collapse of travel companies as standard so its worth checking the level of cover you have chosen.

    If you have a Staysure travel insurance policy then the collapse of airlines is covered under our End Supplier Failure section which is included as standard in our Comprehensive Travel Insurance policies.

    As part of the End Supplier Failure cover we provide, everybody who is named under the policy should be covered to claim up to £3,000 compensation.

    If you booked your travel or holiday along with somebody who is not covered by a Staysure Comprehensive Travel Insurance policy, then you would not be able to claim for their share of compensation under your policy even if you booked the holiday or flights.

    To claim against the collapse of companies on your travel insurance policy, you will only be eligible to claim if you cannot claim compensation by any other means.

    What Happens When A Life Insurance Company Fails

    Failures and bankruptcies are uncommon. According to the National Organization of Life and Health Insurance Guaranty Associations , no life insurance companies have filed for bankruptcy since the 2008 financial crisis.

    But if a failure or bankruptcy does occur, then safeguards are in place to protect consumers. These include:

    • Statutory reserves
    • Reinsurance
    • Guaranty association membership

    Life insurance companies are required by state law to maintain capital reserves to pay out policyholder death benefits in the event that the business fails. The amount thats required to be held back can vary from state to state, but these reserves, along with other company assets, can be used to fulfill claims if the company goes bankrupt.

    Reinsurance is another strategy that allows insurance companies to mitigate the risk of potential losses if a business failure occurs. Essentially, life insurance companies purchase insurance policies from other insurers, which allows them to spread out risk. So if one company goes under, for example, then the other companies can take up the reins to ensure that any claims or death benefits are paid.

    Does Your Travel Insurance Cover An Airline Going Bust

    If you have an annual travel insurance policy you may want to dig out the paperwork and find out whether you have scheduled airline failure cover, because given the state of the industry at the moment, you will almost certainly want a policy that includes it.

    In the wake of last weekends Monarch collapse, Guardian Money has been examining the terms and conditions of some of the UKs most popular travel insurance policies.

    The headline findings? A surprisingly large group of insurers, including some big-name banks, will decline to step in and pay up if your chosen airline collapses either before you are due to travel or while you are away.

    Travel policies offered via paid-for bank accounts with NatWest/RBS dont offer scheduled airline failure cover, and neither does HSBC for its Premier account customers, though it said it would consider claims following an airline collapse. Another of the UKs biggest insurers, Axa, does not provide this cover on either its own annual or single-trip policies.

    Lloyds Banks popular annual travel policies do not feature the cover, but Axa, which underwrites Lloyds policies, has said the banks travel disruption cover would pay up to £5,000 per person in the event that the insured individual cant reclaim the extra costs from another source.

    Today, insurers offering scheduled airline failure cover typically state that they would only step in where the other protections Atol or credit card have declined to pay out.

    Youve Not Travelled And Your Holiday Provider Goes Bust

    What does travel insurance cover?

    If youve booked a package holiday, you should be able to claim a refund through ABTA, which is the Association of British Travel Agents. While ATOL covers flight-based holidays, ABTA tends to deal with rail, cruise and driving package holidays.

    If youve arranged your accommodation yourself and the provider such as the hotel goes bust, you may be able to claim on your travel insurance. This is why its always good idea to buy insurance when you book your trip.

    My Flight Has Been Cancelled What Are My Rights

    There are strict consumer laws that have been in place since long before coronavirus pandemic dragged the issue into the spotlight.

    For flights booked separately by you, you are entitled to:

    • Full cash refund up to seven days after the scheduled flight, as long as:
    • The flight was cancelled by the airline
    • The flight was due to take off or land in the EU
    • The airline is headquartered in the EU if the flight lands in the EU
    • Return journeys are also covered.
    • You might be offered a voucher for booking a holiday as replacement for cash but you do not have to accept.

    In May 2020, the European Commission recommended that any unused vouchers should be automatically refunded as cash by airlines 14 days after they expire.

    However, this is not a legal requirement and so you will need to check the airlines policy first.

    If the airline is dragging its heels on your refund:

    • Dont give up

    Find out more: Coronavirus: how to claim refunds

    If it still wont provide you with a full refund, there are alternatives:

    Paid by credit card? Try to claim through your provider under Section 75 of the Consumer Credit Act for sums between £100 to £30,000Paid by debit card? You could try using the banks chargeback scheme

    REMEMBER: This only applies if the airline cancelled. They are under no legal obligation to refund you if you decided that you do not want to take the flight, even if the reason is a very good one.

    Coronavirus Travel Insurance And Holiday Cancellations

    Coronavirus has probably changed the way you think about holidays. Whether its UK or abroad, one of your concerns is going to be how safe your money is when you book and what you can do if your holiday is cancelled. This guide covers your options.

    Whats in this guide

    Can I Claim On Insurance If Im Offered Rebooking Vouchers

    If you accept vouchers or refund credit notes as compensation, you cant claim for cash from your insurer as well, as this would be a double claim.

    Legally, you should be able to reject vouchers and get cash refunds instead, but many holiday firms have ignored this rule.

    Your insurer will likely advise you to pursue this legal right if youre in this situation. The ABI told us: Where travel operators have a legal obligation to refund customers, insurers expect them to honour that legal agreement. Insurance cancellation cover kicks in when no other safety net is available.

    After campaigning from Which?, the government confirmed that RCNs will be covered by the travel industrys Atol scheme. This means if you accept an RCN and your holiday provider goes bust, your money will be protected.

    If youre not offered a cash refund by your travel operator, and you dont want to accept an RCN, Which? believes banks should refund customers under Section 75 of the Consumer Credit Act 1974, for purchases by credit card of more than £100, or through the chargeback scheme for other purchases.

    Banks dont always accept these claims, but card issuer Mastercard has confirmed that chargeback is valid in these cases.

    Which Policies Have The Best Coronavirus Cover

    From fresh lockdowns and changing lists to getting sick or being denied boarding, there are still dozens of ways the pandemic could wreck your holiday, even if youve been vaccinated.

    This is even the case if youre travelling to a green list country.

    Thankfully, there are some insurers who offer protection for all or many of these.

    Weve sorted policies into four categories based on the strength of their Covid cover. From weakest to strongest these are:

    • Basic For policies providing emergency medical cover and repatriation for coronavirus while youre away.
    • Low Insurance that covers unrecouped costs from cancelling your holiday if youre diagnosed with Covid-19.
    • Superior Policies that cover cancellation if youre told to self-isolate without testing positive yourself, for example if you receive a test and trace notification via the NHS app.
    • Complete Our highest rating. Complete policies cover you for cancellation if you cant travel due to changes in FCDO advice or because of a lockdown.

    We gave our Complete rating to just two policies . Both of these are from banks. The Barclays Travel Pack add-on is for current account holders, and HSBCs Select and Cover, is available to current account, savings account, mortgage and credit card customers.

    Youd be eligible for HSBCs travel insurance if you opened an Online Bonus Saver account with a minimum of £1.

    And 53% of the policies we analysed had Low cover, while 14% received our Basic rating.

    I Have An Upcoming Trip

    Customers must check their local restrictions carefully, as travelling either in the UK or overseas while UK Government or Devolved Government restrictions are in place could invalidate your policy. Please see specific guidance for England, Scotland, Wales and Northern Ireland.

    For any cancellation claims for overseas bookings, you should first ask your airline or travel provider to postpone your trip or arrange a refund. If you have booked a package holiday, under The Package Travel and Linked Travel Arrangements Regulations 2018, your rights are legally protected and therefore you should liaise with the tour operator for a refund.

    If your flights were not booked as part of a package, you may still be enetitled to a refund under the EU Denied Boarding regulations if your transport was cancelled, and therefore you should liaise with your airline for a refund.

    If the airline or travel provider wont postpone your trip or provide a refund, then please contact our claims team.

    For accommodation, excursions, car hire and other pre-paid charges that were not purchased as part of a package, you should contact the provider. If you paid by credit card, contact the card issuer or PayPal for advice on how to claim a refund. If you cant obtain a refund from any other source, then please contact our claims team.

    If the airline or travel provider wont postpone your trip or provide a refund, then please contact our claims team.

    Will Your Travel Insurance Cover You If An Airline Goes Out Of Business

    Travellers booking expensive flights for later in the year have been warned that too many insurers are still failing to offer scheduled airline failure cover.

    Earlier this week the Italian airline Alitalia started bankruptcy proceedings, and while it continues to operate, the news it has entered administration has prompted a renewed focus on how many travellers are covered if the worst happens.

    According to financial analysts Defaqto, about 40% of both single trip and annual travel insurance policies currently on sale do not provide any cover in the event your airline ceases trading.

    A series of high profile airline failures most notably Flyglobespan in 2009 and XL Leisure in 2008 left thousands of customers stranded abroad or holding worthless flight reservations. It also prompted more insurers to start offering SAF cover as standard. Today it tends to be offered by the slightly more expensive insurers and its presence is a good test of a policys suitability. Travellers need a policy in place once they have made a booking to be covered for SAF.

    Brian Brown at Defaqto says it is vital to check with your insurer that you have an adequate level of cover in place. Only policies which cover scheduled airline failure will pay for the cancelled flight if the airline goes bust. Though some policies will also pay for other potential losses such as pre-paid accommodation, car hire and pre-booked excursions, not all will do so.

    What Happens If Only Part Of My Holiday Has Been Cancelled

    If part of your holiday is cancelled and it wasnt booked as a package holiday, its possible that only the provider of the cancelled part of your holiday will offer you a refund.

    For example, if your airline has cancelled your flight, but your hotel booking is still available, you will only be entitled to a refund from the cancelled flight.

    But its worth contacting the holiday provider of the parts that have not been cancelled to see if they will offer you a refund before making a claim on your travel insurance policy.

    If the travel provider is still offering their service , then you will not be entitled to a refund and you are unlikely to have the right to claim on your credit card.

    For more help about making a claim for a cancelled holiday if you booked it as a package holiday, visit the Which? website

    Are You Protected If Your Insurance Company Goes Belly

    What exactly is travel insurance? Do you need is and ...

      Problem with a bad bank? The Federal Deposit Insurance Corporation has your back. Had a brokerage account that went under? The Securities Investor Protection Corporation has you at least partially covered. Your life insurance company goes bankrupt? Dont worry, either. There are mechanisms in place to keep you covered.

      Despite the federal takeover of AIG in September 2008, most people are surprised by the fact that the role of consumer protection against insurance company failures actually falls into the hands of state governments. State insurance regulators are responsible for monitoring the financial health of the insurance companies that are licensed to do business in their respective states. If you have a life insurance policy, heres what to know about how youre protected.

      Will I Have To Self

      Each country will have its own rules for self-isolating so make sure you check before you go anywhere.

      But what about your return to the UK? You only need to self-isolate in a government-approved hotel if you have visited a country on the red list in the past ten days and hold a British or Irish passport.

      Anyone travelling from a red list country who isnt a British or Irish citizen is banned from entering the UK.

      • Bear in mind that you have to pay to self-isolate in a hotel for 10 days

      This can be expensive. For example, a family of four arriving in England will face costs of up to £3,700:

      Per single passenger = £1,750 to cover Covid tests, transport, accommodation and foodAdditional passengers = £650 eachChildren 5-12 = £325Children under 5 = £0

      You can keep yourself up to date by checking the Foreign, Commonwealth & Development Office website or for the latest developments.

      What Should I Do If My Travel Company Goes Bust

      October 18, 2018

      Cypriot carrier Cobalt Air has collapsed leaving many people out of pocket, while others are stranded overseas without a ticket home.

      The news comes just weeks after budget Danish airline, Primera Air, announced it had ceased trading.

      If the worst has happened to you, read the advice below to find out what your options are and the next steps you should take.

      Help And Support With Your Travel Insurance

      The Government announced a new Traffic Light Scheme for Travel from Monday 17th May. Under this scheme you will still be covered to travel to destinations on the amber and red list, providing there is no advice in place from the FCDO against all travel or all but essential travel. You can check the FCDO website for the latest updates. You may be able to claim for cancellation if your destination moves from one level of advice to another in the traffic light system, please check your terms and conditions.

      You will not be covered for any event you were aware of when booking your holiday or purchasing your insurance, and there is no valid cover if you fail to provide the required tests and/or documentation required to travel e.g. a negative test result.

      For the latest information regarding our opening times, please visit AXA Insurance on page or .

      Your Rights With Atol

      If you are abroad on a package holiday or flights plus holiday and your airline fails, your tour operator will take care of you at no extra expense.

      If an airline fails before you travel, your tour operator must offer a replacement holiday or a refund.

      If the tour operator fails, and it has an ATOL you will:

      • get home if you are already on holiday
      • get a full refund if you have not yet travelled

      Usually you will be able to return home as planned, on the same date and to the same UK airport.

      Occasionally you may need to extend your holiday by a few days or fly back to or from a different airport. You wont be charged again for your return flight or for any extra transport you need because of a change of airport.

      Am I Protected If My Travel Provider Goes Bust

      If you’ve booked a package holiday with a reputable travel company, you should have protection for your booking through either ATOL or ABTA.

      ATOL is a scheme run by the UK Civil Aviation Authority and applies to package holidays with flights and some flight-only bookings.

      If you are abroad when the travel company goes bust, the scheme will make sure “you can finish your holiday and return home” – similar to the holidaymakers who were affected by Monarch Airlines in 2017.

      Brits who have yet to go on holiday will receive a full refund through ATOL within 28 working days, although this can take longer if they are dealing with large number of claims.

      Any non-flight holidays, such as cruise holidays, are covered by ABTA.

      They offer both legal and financial protection and protects you whether your holiday was mis-sold or the holiday provider goes bust.

      ABTA would also protect Brits by ensuring they are able to get home and get a full refund in the event of the company going into administration.

      It is also best to book a holiday on a credit card, as this offers protection for holidays over £100 under Section 75 of the Consumer Credit Act.

      Bookings that are flight-only are also protected by credit cards, as most are not covered by ATOL.

      It’s also worth having travel insurance, and checking the fine print to make sure you’re completely covered.

      If My Travel Company Goes Out Of Business Is My Money Protected

      Financial protection means that, as a consumer,  if the company you have booked with goes out of business, you will receive a refund if you are yet to travel, or be brought home if you are already on holiday and your package includes return transport.Package holidays sold to you in the European Economic Area by ABTA Members are financially protected. Package holidays that are for less than 24 hours, or are for business travel, may not be protected.

      Additionally some ABTA Members protect other services such as accommodation-only sales, so when booking with an ABTA Member you should check this.

      There is no scheme of financial protection that covers flight bookings made directly with airlines, or flight only bookings where a travel agent issues you the ticket when you book. You should look into obtaining insurance cover.

      If you buy a linked travel arrangement you have some financial protection. For more information here

      When All Else Fails

      If you cannot get redress by following the above, then the only other option would be to go through companys liquidation process . However, going down this route may not result in getting your money back. Unfortunately, consumers are regarded as unsecured creditors. This means that other creditors, such as the taxman and staff of the company, will rank higher than consumers when it comes to dividing the companys assets and, as a result, there may be little or nothing left for consumers after secured creditors get all or some of the money owed to them.

      What Happens If My Cruise Line Goes Bankrupt

      Will your travel insurance cover you if an airline goes ...

        Sailing on the dark waters of the English Channel and steaming southbound through the night toward Guernsey, Durant Imboden was surprised to feel the ship, the MV R7, steer sharp to the starboard side. Suspecting that, for some reason, the ship had reversed its course and was now heading north, he quickly consulted the GPS map on his state room television and confirmed that the R7 appeared to be heading back to its embarkation port of Dover. 

        “I was mostly curious about what was going on,” Imboden remembers. “And what would happen next.”

        Fortunately, all went smoothly, and both cruisers and crew were repatriated to their home countries by the company. Says Imboden, “As I recall, similar scenarios played out across the world.”

        In some ways unthinkable, Imboden’s experience raises a question worth considering: What should you do if you’ve booked a cruise, and the company goes bankrupt? And how can you protect yourself?

        Top Tip: Check With Multiple Companies

        If a travel company or travel agent goes bust, it’s always best to check in several places to find out if your booking could go ahead. 

        • If your travel agent goes bust, contact your tour operator, your accommodation provider and/or your flight provider/airline.
        • If you booked through a travel agent and your tour operator goes out of business, contact your agent for assistance.
        • If you have made a booking with a company that has gone out of business, and that company is an ABTA Member, you may be able to make a financial claim.

        When An Airline Suddenly Ceases Operation

        The first thing to consider is travel insurance, but not just any policy!! Theres lots of choice out there with competing prices and the usual bells and whistles. To protect yourself from the all too real possibility of the airline going bust, you need to scrutinise the policy documents carefully to check that it will cover for financial failure.

        When youre searching online for travel insurance you should look for a link to the policy documents and then carefully scan the summary of cover to see if it includes scheduled airline failure or similar; it should also give details of the cover limit and the excess to be paid in the event of a claim, if any. While youre at it, you could also check for things like strike cover as not all policies have this. Then, once youre satisfied it has the cover that you want, it should be safe to go ahead and compare prices, and of course do all the usual checks that you would do with any online trader.

        Normally, under Regulation 261/2004, when a flight is cancelled, the airline should offer rerouting or refund, however, this is not possible when the airline ceases operations. If you have been affected then there are a number of actions you can take:

         

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