Protecting your holiday from a cancellation catastrophe

Looking forward to a holiday? How can you protect yourself if your travel operator goes bust?

Once the credit crunch hit, the newspapers filled up with stories of people stranded overseas because their providers had collapsed, or left holiday-less in the UK - out of pocket and out of patience.

So what steps can you take in order to protect your plans from a cancellation catastrophe? Well, we asked travelsupermarket.com’s travel expert Bob Atkinson for his top tips when booking a holiday.

Here’s what he came up with:

Pay for your travel plans with a credit card or Visa debit card

If you use a credit card to pay for your trip then you receive additional protection. That’s because under the Consumer Credit Act, the credit card provider is jointly liable for the purchase, if it's over £100 in value.

This means that if the provider goes bust and can’t refund you, the credit card company will.

With a Visa debit card, you are protected by the Visa Debit Chargeback scheme. As long as you make your claim within 120 days of the firm going bust, you can claim your money back from the bank.

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Book with an ATOL operator

The Civil Aviation Authority (CAA) operates its ATOL – Air Tour Operator Licence – scheme. Tour operators and travel firms that sign up are inspected by the authority and have to take part in a financial guarantee scheme that pays out to customers if a company goes out of business.

So, if your their operator collapses then holidaymakers don’t lose their money. If they are already overseas, the CAA steps in, allowing them to finish their trip and fly home. Tour operators who sell packages without this cover are not operating legally, so always ensure your package holiday has ATOL cover.

Bob said: “If you’re buying two or more ‘elements’ of your trip through one operator – like the flights and the hotel – use an ATOL-backed firm if you can.

“Apart from trips from On The Beach, all the package holidays featured on travelsupermarket.com are covered by the ATOL scheme.”

Use a licensed agent

Whether you’re on the high street or the web, make sure your travel agent is a member of ABTA (Association of British Travel Agents), TTA (Travel Trust Association), or Global Travel Group.

Members of reputable organisations like this have financial protection in place to protect their customers in case a supplier they have booked for them goes under or turns out to be fraudulent. It also covers you if the travel agent itself should cease trading.

Bob said: “Some agents will use their own schemes, so make sure you ask them exactly what happens if one of their suppliers goes under. All the agents featured on travelsupermarket.com belong to a scheme.”

Be careful when going it alone

If you book the various elements of your holiday individually – for example, arranging the flight by itself or the hotel separately – you may have no extra protection apart from what’s offered by your payment card.

You might have travel insurance but some policies won’t cover individual elements if one particular supplier goes bust.

However, you can buy specific insurance that protects your holiday plans against supplier failure.

Bob said: “These policies can cost as little as £4 but can give you that extra peace of mind. Be careful, though, as not all airlines are covered. Check with your insurance provider before taking the policy out.”

Buy travel insurance

A decent travel insurance policy is a must for anyone enjoying a holiday. It will cover things like medical costs, lost baggage, repatriation, legal costs and cancellations.

Use the moneysupermarket.com travel insurance comparison tool to find the best offers. If you are a regular traveller, an annual policy is probably a cheaper option, but don’t forget to renew it.

Bob said: “Make sure you buy your travel insurance at the same time as you make your travel arrangements – don’t leave it until the last minute. That way, if something comes up that stops you taking your trip – perhaps illness or a bereavement – you are protected. Always check to see what items you are covered for and which you are not. That way there will be no nasty surprises for you.”

Pick up a European Health Insurance Card

If you’re travelling within the EU, you should carry a European Health Insurance Card. These are free and entitle you to any necessary medical treatment that would be provided to citizens of the country you’re in.

The card should allow you free treatment or at a reduced cost.

Bob said: “This card is very useful but it does not replace a travel insurance policy and people should make sure they are protected by both.”

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