The AA has joined forces with International Passenger Protection Limited (IPP), to include end supplier financial failure cover on all of their travel insurance policies.
The decision to increase cover was made in light of market demand arising from poor industry forecasts and general public confusion as to what is covered by the Governments ATOL scheme.
Consumer protection in the UK is mainly limited to package holidays, which consists of a flights plus other component part of travel booked at the same time with through the same company, and does not necessarily extend to independently assembled holidays which have become so much more popular with the availability of the internet. Also flight only bookings and flights purchased directly from airlines have no formal protection and it’s not just the flight part of the holiday that is not protected but all the other parts of a non packaged holiday such as ferry, train, hotel, car hire, coach, holiday homes, tours and fun parks etc.
The general public is confused over what exactly is covered under the ATOL and many travellers are becoming aware of the gap in consumer protection and are looking for cover from their travel insurance providers.
Last year proved the largest losses to the airline industry in its history with over 50 airlines collapsing, many of them small to medium in addition to some top 5 country airlines such as XL Airways (UK) and Nationwide (South Africa).
The cover protects travellers against the insolvency of un-bonded end suppliers up to £5,000 per person with a nil policy excess, so it addresses the needs of the complete cross-section of travellers from the budget weekend trip to long haul vacation. If the failure occurs prior to travel then the Insurance will refund the lost ticket money. If the failure occurs during the trip then the insurance covers an equivalent return ticket, which usually costs much more then the original ticket price.
Travel insurance: News update: 31/07/2009