With soaring oil prices there are likely to be some business casualties. There is a great risk of airlines going bust. In the last six months, over twelve carriers have lost the battle to stay afloat through these difficult times. Airline insolvency is not something that is going to go away and passengers need to look into protecting themselves against being stranded without a flight as well as losing money.
Despite the increasing risk of carriers going bust, many people are unaware that very few travel insurance policies provide any cover. Few insurers will add cover on request.
Many people manning insurer and broker helplines are themselves confused over what cover applies and when – it is not a question they have been asked over the ten year boom.
Few offer Scheduled Airline Failure Insurance (SAFI) – the industry term for cover if a carrier fails. And while consumers are protected if their flights are part of a holiday package bought from a UK tour operator, they may get caught out if they book flights with a travel agent or direct from the airline.
The people most at risk are those who arrange their own holidays without going through an agent or if buying flights direct from an airline instead of through a tour operator.
Travel insurance: News update: August 2008