Majority of travel insurance policies fail to cover airline failures

Monday, 28 June 2010 11:35

By myfinances.co.uk staff

Holiday makers are being warned to review their travel insurance policies to see whether they cover the failure of scheduled airlines.

Independent financial research company Defaqto suggests most do not claiming only around 20% of travel insurance policies provide adequate cover. In fact it suggests that 77% of travel insurance policies provide insufficient cover to holiday makers whose travel plans are disrupted by air travel disruption, such as that caused by the recent volcanic ash cloud that ground UK flights for several days during April.

Brian Brown, author of the report and Head of Research at Defaqto said: "While many give cover of £1,500 or more for scheduled airline failure the limit may not be sufficient to cover all of the other pre-booked and paid for items such as hotel accommodation, excursion tickets and car hire so it is essential that travelers review the details of their policy before they set off on their travels."

Defaqto says consumers wishing to avoid further difficulties should travel with an ATOL or ABTA bonded organization which offers considerably more protection than independent arrangements as the problems of airline failures and the volcanic ash cloud have highlighted.

It also advises travelers to use their credit card when booking as using a credit card on purchases of £100 to £30,000 provides some statutory protection if the company or supplier goes bust or if there is a problem with the goods or services.

Mr Brown added: "Not everyone has the same needs for their travel insurance arrangements so it is important to take some time to review features carefully. We reviewed 885 products for our travel insurance Star Ratings across single trip, multi trip and gap year travel so there is a lot of choice available. Consumers can use our Star Ratings as a guide to what is on offer. 1 or 2 Star Rated policies offer a lower level of features than 4 or 5 Star policies."

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