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XL collapse: passengers unlikely to be covered by insurance

XL airways

The majority of travel insurance polices will not cover holidaymakers should their airline or tour operator go under.

 

Most insurance policies will not pay out in an event such as XL, the stricken tour operator that has collapsed. Only a few travel policies cover failure of tour operator/travel agent.

 

XL airways collapse: are you covered by insurance?

 

Post Office, M&S annual policies and AXA Direct policies will pay up if an airline goes under. Swiftcover allows travellers to bolt on the protection for an extra £1.

 

The Post Office includes as standard cover maximum £1,500 compensation should your airline go down, with M&S offering a £6,000 maximum and AXA £3,000.

 

Very few companies offer protection against your airline going bust. It is extremely unusual. But it is possible to get if you really want peace of mind. The problem is that many holidaymakers buy the cheapest contract they can find off the Internet, and if you pay £5 for your cover don't be surprised if all you get is £5 worth of protection.

 

While some insurers have added cover, others have absolutely no sympathy for travellers. One leading insurer says that travel insurance is designed to protect you in the event of a medical emergency, against cancellation or loss of baggage. It is not there to make up a commercial loss in the travel industry. Another argues that insurance is not there to cover against the failure of a contractor, saying it would be like saying your household contract should pay up when your plumber goes bust. However, not many plumbers leave you stranded on the other side of the world!

 

Travel insurance pays out around £190 million a year medical costs, £116 million for cancellations and some £30 million for lost possessions.

 

Travel insurance: News update: September 2008

 

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