Not all travel-insurance policies will cover situations involving bankruptcies
The good news: Thomas Cook customers are protected by the British government. The U.K. requires most tour operators to hold Air Travel Organisers’ Licensing (ATOL). Operators who hold this license pay into a national fund when they book trips, and that money is set aside in the event that the operator goes out of business.
Thomas Cook held an ATOL license, which is what has enabled the British government to organize the repatriation effort and fly people back to the U.K. from the destinations they traveled to around the globe. The fund will also pay people back for money spent on upcoming trips through Thomas Cook.
Unfortunately, not all Thomas Cook customers will qualify for this assistance, as it is reserved for people who booked all-inclusive packages. Those who simply purchased airfare from Thomas Cook will have to rely on other avenues for getting reimbursed.
“ATOL Protected passengers with future bookings are entitled to a full refund for their cancelled holiday,” the U.K.’s Civil Aviation Authority said Monday. “Passengers currently overseas may also make claims for the cost of replacing ATOL protected parts of their trip, or for out of pocket expenses as a result of delayed flights home.”
The government plans to launch a service to manage refunds by Sept. 30.
Americans, meanwhile, have no such protections. Therefore, travelers should consider purchasing travel insurance (or using a credit card with thorough travel insurance protection) if they are worried about a company going bankrupt.
“Many travel insurance policies include coverage for ‘financial default’ of a travel provider,” said Steven Benna, content director at travel insurance website Squaremouth.com.
Travel providers can include airlines, cruise lines, hotel chains and, yes, tour operators. But there can be some catches. “Financial default coverage may not cover travelers if they booked directly through Thomas Cook,” Benna said. “This is because some policies do not provide coverage if the company that solicits the travel insurance goes bankrupt.”
Read the full MarketWatch article online here: https://www.marketwatch.com/story/how-the-collapse-of-travel-company-thomas-cook-could-lead-to-deals-for-american-tourists-2019-09-24?mod=retirement