Adventure Art Travel

A report in The Guardian suggests that customers with the collapsed travel company XL who attempt to make a claim with their web or conventional travel insurance provider may be refused a payout as business failures are not covered by standard policies.

One company that does provide this type of cover is web based Post Office Travel Insurance

The Association of British Insurers (ABI)  warns that some high-end travel insurance deals offer cover against an airline or tour operator going bust, the majority do not.

The ABI said web travel insurance policies were primarily designed to offer cover for medical expenses resulting from accidents or illness abroad, and lost or stolen baggage.

Cover by company bankruptcy was filled by the Civil Aviation Authority’s Air Travel Organisers’ Licensing (Atol) scheme, which offers compensation to holidaymakers who book through tour operators and travel agents. The scheme does not offer payouts to the increasing number of travellers opting to arrange their trips independently.

Customers who check the small print of their policies may discover they are uninsured if their package holiday or flight is cancelled as a result of an airline or holiday firm going bust. Their only option will be to make a claim with their credit card company.

Such claims are excluded on policies from most providers, including Halifax, More Than and Insureandgo and Direct Line.

Direct Line – a popular web travel insurance company, said it would be looking at how it could help customers who had lost out as a result of the XL collapse.  The exclusion could catch out many more holidaymakers over the coming months if, as expected, there are further casualties in the airline industry.

No doubt it will also see many more people buying Post Office Travel Insurance just in case their travel companies have the same problems as XL.