Government to deliver travel insurance warning

Holidaymakers should be made aware that standard travel insurance does not normally include flights home when an airline goes bust, according to a high level committee.

A Parliamentary Transport Committee said the government should work with the travel insurance industry to ensure that holidaymakers were aware of what travel insurance covered.

Many passengers simply assume that when they book a flight their money is safe, especially if they have bought their fare via a travel agent or tour operator.

However, if they have booked a flight without accommodation or direct with an airline, they might have no financial protection.

Standard travel insurance does not normally pay out for airline failures, but passengers can buy Scheduled Airline Failure insurance for a small additional fee.

The Parliamentary Transport Committee said that licensing should be extended to include scheduled airlines so that passengers would be refunded when an airline collapsed. At the moment, only package operators and charter airlines need to have a licence and only package holiday clients are protected.

The Parliamentary Committee report said: We remain concerned that air passengers are not adequately protected from airline collapse.""

It pointed out that the number of passengers who were travelling without financial protection was increasing as more and more people are booking flights direct with airlines on the internet.

Such bookings give the customer no guarantee of a refund if their airline goes bust, though paying with a credit card or Visa debit card may give them some protection.

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