Travellers booking expensive flights for later in the year have been warned that too many insurers are still failing to offer scheduled airline failure (SAF) cover.
Earlier this week the Italian airline Alitalia started bankruptcy proceedings, and while it continues to operate, the news it has entered administration has prompted a renewed focus on how many travellers are covered if the worst happens.
According to financial analysts Defaqto, about 40% of both single trip and annual travel insurance policies currently on sale do not provide any cover in the event your airline ceases trading.
A series of high profile airline failures – most notably Flyglobespan in 2009 and XL Leisure in 2008 – left thousands of customers stranded abroad or holding worthless flight reservations. It also prompted more insurers to start offering SAF cover as standard. Today it tends to be offered by the slightly more expensive insurers and its presence is a good test of a policy’s suitability. Travellers need a policy in place once they have made a booking to be covered for SAF.
Brian Brown at Defaqto says it is vital to check with your insurer that you have an adequate level of cover in place. “Only policies which cover scheduled airline failure will pay for the cancelled flight if the airline goes bust. Though some policies will also pay for other potential losses such as pre-paid accommodation, car hire and pre-booked excursions, not all will do so.”
He advises buyers to pay for major holiday purchases using a credit card rather than a debit card, so that they receive enhanced purchase protection through the Consumer Credit Act. It’s much easier to claim from an insurer than the credit card company if an airline ceases trading between your booking and the date of travel.
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