What is scheduled airline failure insurance?
Until recently, there was a gap in financial protection for travellers who chose to book their own flights directly with the airline.
If you book a flight as part of a package trip, or you book flights and car hire together, you're financially protected through ATOL if your airline or car hire firm goes into administration before you leave or while you're away.
ATOL cover means you'll be reimbursed for your unused travel tickets, and if necessary, the travel agent will arrange for you to be flown home by another airline.
However, booking your flights directly with the airline doesn't give you ATOL cover. In the past, this has meant when an airline went bankrupt, thousands of travellers were left stranded and out of pocket.
Scheduled airline failure insurance is a specific type of travel insurance that protects travellers who choose to book flights only directly with an airline rather than as a package.
Why do I need scheduled airline failure insurance?
If you plan to book flights directly with an airline and separately to your accommodation, car hire and excursions, you may lose money if your airline fails.
Paying by credit card can offer some recompense, as you'll be protected by the Consumer Credit Act. Provided your flights cost between £100 and £30,000 you should be able to claim back the cost of the flight or the cost of replacement flights home if your airline goes bust while you're abroad.
However, if you use cash, cheque or a debit card to pay for your flights, you probably won't get this protection.
Where can I purchase this insurance?
Scheduled airline failure insurance can be bought as a separate policy, but it can also form part of your travel insurance.
Not all providers offer it as part of their standard travel insurance package, so check your policy before you buy.
What if I've booked all elements of my holiday independently?
More and more of us are choosing to book all the different elements of our holiday - flights, train, ferry, accommodation and activities - directly with the end supplier.
This guarantees we get exactly what we want, but it can leave us financially exposed if any of these suppliers go bust. Not only will we lose the money we've already paid out, but we also need to pay again to rebook with someone else.
That's why insurance companies are now offering both scheduled airline failure insurance and a more comprehensive cover called supplier failure insurance.
This type of insurance extends failure cover to all transport providers, accommodation providers, car hire companies and sometimes excursion providers as well. LV= offer this extended financial failure protection on their Premier travel insurance cover.
What can I claim for?
With scheduled airline failure insurance, you can claim for:
- The cost of the flight tickets if the airline goes bankrupt before you fly
- The cost of replacement flights if your airline goes bankrupt while you're away
With supplier failure insurance, you can claim for:
- The cost of any unused travel tickets, accommodation and excursions
- Extra costs incurred replacing the service provided by the failed supplier
- Cost of transport home if you can't continue with your trip
When you contact your insurance company to make a claim you'll need to have evidence of the expenses you want to claim for. So hang on to receipts or invoices for travel tickets, evidence of bookings for accommodation and excursions.
And of course, you can only claim if the travel insurance policy was in place before you knew that the airline, hotel or other supplier would possibly go bankrupt. That's why we advise you to take out travel insurance at the same time you make your travel bookings.
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