Check travel insurance for airline collapse

Friday, 04 September 2009 12:00

With the bankruptcy of yet another airline, insurers are urging customers to check their travel cover.

Slovakia-based SkyEurope suspended flights earlier this week to Manchester and London Luton, stranding holidaymakers abroad.

But many travel insurance policies do not provide cover in the event of an airline or travel company files for bankruptcy, according to Marks & Spencer.

This is because many policies assume travellers will be covered under the travel industry's Atol scheme - but this only applies to holidays booked through a travel agent as a package.

Steve Price, M&S head of general insurance, said: "Whilst passengers booking flights as part of a package holiday enjoy protection in the event of an airline collapse, travellers booking flights independently can often find themselves stranded and out of pocket.

"Traditional policies may not cover the increasing variety of eventualities faced by the modern traveller. The Independent Traveller cover provided by the M&S travel insurance policy has been designed to meet the changing needs of our customers."

Online travel booking services and budget airlines have changed holidays and independent holidays rose 25 per cent from 2003 to 2008.

According to a Mintel report, package holidays now account for just 41 per cent of the overseas holiday market.

However, few insurers offer cover for airline failure, with Swiftcover, the Post Office and Saga among those offering the protection.

Booking with a credit card will also give you some protection against a firm going bankrupt, under the Consumer Credit Act.

Booking with a credit card will also give you some protection against a firm going bankrupt, under the Consumer Credit Act - but only if the cost of the tickets is over £100. Credit cards, though, will not cover the cost of finding a ticket home - only covering the original loss.

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