The stunning collapse of UK’s giant tour operator Thomas Cook, which left more than 600,000 holidayers stranded in some 18 countries (150,000 from Britain alone) shows just how vulnerable travellers have become to circumstances beyond their control.
That’s almost twice the number of travellers stranded when Monarch airlines went under in 2017, and an additional million more that lost their future bookings.
The liquidation of the 178-year old tour company whose logo has become a familiar sight worldwide propelled the UK’s Civil Aviation Authority (CAA) to mobilize its “biggest peacetime repatriation” since the second world war to get its holidayers home—within the next two weeks and free of charge.
The repatriation is being funded largely by the government-run Air Travel Organizer’s Licence (ATOL) system which requires travel companies who sell air holiday packages to meet certain licensing requirements and contribute to a trust fund protecting travellers in case one of its members goes bust and leaves customers unprotected while abroad.
However, not all segments of the travel merchandising chain are covered by the licencing requirements, and according to travel experts in the UK, the implementation of new EU rules have become just too complicated for holidayers planning and seeking to protect their trips, to understand.
In Canada and the US there are no programs similar to UK’s ATOL system, so travellers must rely on individually-purchased trip cancellation/ interruption coverage. But trip cancellation and interruption policies require scrutiny: they do not cover everything.
There’s a lot of fine print, and there are limitations. But one fundamental is that cancellation policies are designed to cover only the non-refundable, non-recoverable portion of any air fare or tour package or hotel reservation that has been prepaid. There may also be time limits on how much you may be reimbursed: cancel shortly after you buy your policy and you may get all or most of your money back. Cancel just before your scheduled trip date and you may get very little or nothing. Remember, it’s the protection of your investment over time that you purchased. Check out the detail before you commit.
If your trip is interrupted and you’re delayed or stranded, as were the 150,000 Brits hit by the Thomas Cook collapse, you may not have access to an ATOL type safety net, but a good interruption policy can certainly protect the costs you have already paid, as well as the daily travel and out-of-pocket costs you might need to allow you continue your trip if you missed a portion of it, or to get you back home. And it will certainly cover reasonable out of pocket costs for meals, phone calls, taxis—again within set (published) limits.
But there is no double dipping. If your airline, cruise ship, or hotel offers vouchers for future travel in the event of cancellation or delay, that is considered payment in kind and is not reimbursable by your insurer. And if the price of your policy provides cover for a three-star hotel, don’t expect to be reimbursed at five-star luxury resort levels. This is a financial protection contingency: not a lottery.
Image by Ken Fielding. https://www.flickr.com/photos/kenfielding
© 2019 By Milan Korcok. All rights reservcd.
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