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Archive for May, 2008

Airline failure – why third party insolvency cover is important.

Friday, May 30th, 2008

The world’s last major business-class only airline, Silverjet, has been forced to suspend its operations after a multi-million-pound cash injection from investors failed to materialise. Thousands of Silverjet customers have been stranded or have lost money after the the business class-only airline admitted on 30th May 2008 that it no longer had the cash to continue flying. The airline, which has only been in operation since last year, is the latest to fall victim to soaring jet fuel prices.  “It is with deep regret that the board of Silverjet has therefore decided that it must suspend operations with immediate effect,” it said.  The Civil Aviation Authority estimated that 7,000 British customers and non-UK customers were affected by the airline collapse.  According to the industry regulator, its ATOL protection scheme does not cover passengers who booked just flights direct with Silverjet.  The CAA is advising UK customers who are due to fly back to London from New York or Dubai to make alternative arrangements with other airlines.  The regulator said customers who had booked flights via credit card should be able to receive money back from their credit card company or from their travel agent.  Customers who paid by debit or charge card should contact their card company for advice, or check any travel insurance policy taken out about any airline insolvency cover that may be provided.  The nightmare scenario for any holidaymaker is being stranded when their airline or tour operator goes out of business.  So how do you you protect yourself when an airline or tour operator goes bust?  Who or what is out there?  Some insurers offer Passenger Protection Insurance sold separately or Dynamic Packaging Protection as part of a travel insurance policy but always check the small print if this is offered because these are quite often restrictive in their cover.  You can reduce the risk further by organising your travel through companies and agents covered by ATOL or who hold bonding through an approved body, such as ABTA or AITO.  ATOL stands for Air Travel Organiser’s licensing and is a protection scheme for flights and air holidays, managed by the Civil Aviation Authority (CAA) and protects the customer from losing money or being stranded abroad when a tour operator goes bust.  All licensed firms have to lodge bonds with the CAA so that, if they go out of business, the CAA can give refunds to people who can’t travel and arrange for people abroad to finish their holidays and fly home.  And ABTA?  Members of the Association of British Travel Agents are required to provide financial protection for their customers which means that you can book your holiday knowing that if an ABTA member fails financially while you are on holiday, you can continue your holiday as planned.  If your holiday has not started, then you will receive a full refund or be given help to make alternative arrangements for the trip to proceed.  Likewise AITO, or Association of Independent Tour Operators to give it its full title, require their members to protect their customer’s money in the event of an AITO member going into liquidation.

Golf travel cover

Wednesday, May 28th, 2008

It is always worthwhile looking at the ‘add-on’ options available in a travel insurance policy to provide that essential ‘peace of mind’ when taking a well earned break.  There is nothing worse in finding that the cover taken out does not stretch to the activities you had planned to do or even those that you had not.  Falling into that category is golf travel insurance.  It may be a dedicated trip abroad to try out the many stunning golf courses, not only in Europe but also the USA and increasingly in the Far East, or perhaps a casual round whilst on holiday.  It still pays to be covered.  Golf equipment is expensive and, whether it is delayed in transit or, worse still, stolen, the result is the same frustration, anger and helplessness.  Well, some travel insurance policies on the market can help to lessen these understandable emotions by making available a comprehensive insurance package to cover from this occurring to you.  Working along similar lines to wintersports insurance, you can cover yourself for your own golf equipment and this also extends to equipment hired once at your destination.  By simply selecting the golf cover option on your policy, you are covered for the period you are away.  Again look at the small print but some policies do offer cover for the same flat fee, irrespective of whether it is for a single trip or for an annual multi-trip travel insurance policy.   The latter represents very good value if you are a keen golfer who likes to get away for regular golfing breaks.  What’s more, these policies often include loss of green fees if you are unable to play in the event of delayed arrival at your destination for any reason beyond your control. If you shop around, there are some travel insurance policies on the market which have even thought of covering you for that ‘Holy Grail’ in golf, the ‘hole-in-one,’ and provide a handy sum to reimburse you for the inevitable celebration at the 19th hole!

Happy Campers!

Tuesday, May 27th, 2008

The falling value of the pound abroad and credit crunch at home does not mean total gloom and doom for the holiday maker this year.  Most travel commentators are now indicating a boom in camping holidays in the UK and caravans look likely to make a comeback this this summer.  Figures from the National Caravan Council reveal a 20 percent rise in camp site bookings for July and August, while trade in caravans is steadily rising.  With many people nostalgic for seaside holidays that they remember from their childhood, it is not surprising, given the increasing costs of taking a holiday abroad, that there is now a huge demand for holidays in the UK.  One of Britain’s biggest caravan holiday companies, Haven Holidays, reports a 30 percent rise in bookings with families scrambling for places over the school half term and the main summer holiday in July and August is no different. Is this year then, the time to look at taking a break in the UK rather than travel abroad?  Well certainly worthwhile considering but the same rules apply to holidays in the UK as they do elsewhere, do make sure you are properly covered in case of emergencies.  Travel insurance, for example, is not always thought of as a necessity if you take a break in the UK, being so close to home and under the safety net of the NHS should you have an accident but travel insurance covers much more than medical emergencies.  It is a fact that most people buy travel insurance for trips and holidays abroad but these policies do generally provide cover for travel within the UK, though do check the small print rather than assuming that this is always the case.  So is travel insurance that covers holidays in the UK worth considering?  It can be very useful to have insurance should you subsequently cancel a trip, say for illness, as your holiday costs will be reimbursed subject to any excesses to pay. Your personal effects will probably be covered too which is an important point to consider as theft and loss is not just confined to holidays on the ‘Costas’ – these things happen at home too.  What you will almost certainly not be covered for will be for medical emergencies and expenses as insurers argue that the NHS is available for such instances and will point out that travel insurance is not a substitute for private medical insurance.  One final word of advice though is do check the small print as many, if not most, insurers do require you to have proof of booked accommodation for a minimum stay of normally 2 nights away for the policy to be in force so the Sunday ‘trip out’ is definitely outside this definition.

Airline failure fears continue

Friday, May 23rd, 2008

As we reported last month, the credit crunch and the rocketing fuel price is putting more airlines under pressure.  Silverjet, the sole surviving business class only airline, has suspended trading in its shares due to failing to receive a funding lifeline it was relying on.  Although the airline, which flies to New York and Dubai from Stansted, has not cancelled flights and is still taking bookings, this latest news, following on from the collapse of its business class rival, Eos, at the end of April shows how tough it has become in the airline business.  And this has an impact on us all as summer approaches with many holidaymakers planning their summer breaks, a large percentage of which will involve air travel. The nightmare scenario for any holidaymaker is being stranded when their airline or tour operator goes out of business. Although it isn’t an everyday occurrence, these situations do happen with little or no notice so it is important to ensure that your travel organiser can provide sufficient evidence of security for the refunding and repatriation of customers in the event of insolvency. So how do you you protect yourself when an airline or tour operator goes bust?  Who or what is out there?  Some insurers offer Passenger Protection Insurance sold separately or Dynamic Packaging Protection as part of a travel insurance policy but always check the small print if this is offered because these are quite often restrictive in their cover.  You can reduce the risk further by organising your travel through companies and agents covered by ATOL or who hold bonding through an approved body, such as ABTA or AITO. ATOL stands for Air Travel Organiser’s licensing and is a protection scheme for flights and air holidays, managed by the Civil Aviation Authority (CAA) and protects the customer from losing money or being stranded abroad when a tour operator goes bust.  All licensed firms have to lodge bonds with the CAA so that, if they go out of business, the CAA can give refunds to people who can’t travel and arrange for people abroad to finish their holidays and fly home.  And ABTA? Members of the Association of British Travel Agents are required to provide financial protection for their customers which means that you can book your holiday knowing that if an ABTA member fails financially while you are on holiday, you can continue your holiday as planned.  If your holiday has not started, then you will receive a full refund or be given help to make alternative arrangements for the trip to proceed.  Likewise AITO, or Association of Independent Tour Operators to give it its full title, require their members to protect their customer’s money in the event of an AITO member going into liquidation.

Travel Insurance – check the small print

Thursday, May 22nd, 2008

A common complaint over travel insurance is ‘I didn’t realise I had to do that’ when it comes to making a claim.  Why is this?  Well one main reason is that many of us still simply tick the box on the holiday booking form or on-line cheap flight drop down menu option box without checking to see what the cover provides.  Likewise, many banks now offer free insurance to their premier account holders but these insurances still come with strings attached.  Pleading ignorance is never a strong position to come from when submitting a claim but you can help yourself by following a few simple rules.  Firstly, always get a report from an official source within 24 hours if something goes wrong.  A police report for theft, a tour operator’s reports for baggage delay and loss, an airline letter if you suffer travel delay and a Property Irregularity Report before you leave the airport if your luggage is lost or delayed.  Without these, you will find that insurers will not readily settle your claim.  Secondly, know what valuables you are taking with you and take extra care of them.  Valuables will be defined in your policy but generally includes all jewellery, mobile phones, computer games and equipment and cameras.  Add to this list the personal money you take with you.  By extra care, do lock valuables and money away in a safe in your room or carry them with you.  They should never be left unattended and never placed in checked in baggage otherwise this will almost certainly invalidate a subsequent claim.  Next, do keep receipts.  Not only will this help to substantiate your claim but you are more likely to get close to value of the lost items back, subject to wear and tear.  If no receipt is provided then the maximum amount that will be paid back will be capped at a low level.   Another golden rule is do call the Medical Assistance line if you have to go into hospital abroad or need medical treatment that could be costly. It is worthwhile doing this for anything that could cost over £250.  Once this is on record, you are generally well covered up to the agreed amounts.  And finally, whilst this guidance is for travel insurance policies, many people will have a household policy in force that should cover ‘all risks’ up to a set value and this could also be used for a claims for personal belongings lost or stolen whilst on holiday but do check the small print again to see what exclusions apply.

Protect your travel costs

Monday, May 19th, 2008

It nearly always pays to get cancellation cover for your holiday trip abroad.  All travel insurance policies offer this, though you may find that cover is limited, the cheaper the policy.  This is one reason why some travel insurers offer a series of policies.  Gold, Silver and Bronze for example is a popular method to differentiate policies as is Premier, Standard and Economy.  Cancellation cover will be offered at various rates with £3,000 being a common average figure.  But do look at your personal circumstances and make sure that the cancellation cover you take out is adequate for the trip you plan to take.  If you are going on a cruise, then it is quite possible that you will require a higher level of cancellation cover than, say, for a package holiday to the Mediterranean.  If you are booking a late minute deal, then perhaps you don’t need more than the minimum, if any, level of cancellation cover.  The rule here is to buy the policy that covers your requirements and not just accept the ‘standard’ policy on offer.  What is surprising is that latest research still shows that nearly half of travellers (47%) wait until the last week to buy their travel insurance.  What people, perhaps, don’t realise is that cancellation cover only comes into force when you take out insurance and, if this left until the last minute, then you will not have the protection which you would have had if you had taken out travel insurance at the same time that you booked your holiday, which could be several months before the actual trip.  That way, cover would be provided for a range of events, such as unexpected serious illness to the policy holder, travelling companion and quite often, illness or worse of a close relative which results in you having to cancel your trip.  Whilst on the subject of cancellation, do check that the same level of cover extends to curtailing or cutting short your trip and also look out for holiday abandonment, which is closely linked to cancellation, for when, after a set period of delay at your departure airport or seaport, your policy offers you the option of not continuing your trip and being reimbursed for your costs up to a specified limit.  So the best advice is that travel insurance should not be relegated to a ‘necessary evil’ purchased just before your travel but should be considered as a fundamental pre-requisite to protect your holiday investment.

Look before you jump!

Thursday, May 15th, 2008

Instant decisions can sometimes be costly according to latest government advice.  With the Summer upon us, and many looking forward to holidays and gap years, it is is timely to note that recent research into the 18-35 year old age group shows that 2 out of 3 went bungee jumping on the spur of the moment without checking that they were covered by some form of insurance.  Likewise 1 out 2 did the same when it came to jet-skiing, scuba diving, mountaineering and rock climbing and 1 in 3 when it came to snow sports.  With the cost of medical treatment, such as a broken leg coming in around £5-7,500 and that’s just in Europe, rising to a colossal £24,000 in the USA, then it pays to be properly covered when you go abroad on holday.  Don’t forget though, that travel insurance policies do have exclusions so do check that what you want to do on holiday will be covered and do check that comprehensive medical and repatriation cover is included.  An air ambulance (from Canaries) could cost you £12-16,000, for example, whilst you will need to stump up with £4-5,000 for a week’s stay in hospital in Greece.  Make sure you understand exactly when and where cover is given.  For diving, check the maximum depth covered and for winter sports check whether off-piste is covered.  This also goes for 3rd party liability, for example, if there is any chance you could collide with someone else or someone else’s property or equipment while enjoying your sporting activity.  This is particularly important if you are taking part in winter sports.  Finally, if you find yourself without cover, ask the organisers of the activity to provide cover or consider the purchase of top-up cover if you are involved in hazardous activities and have only basic travel insurance.

China Earthquake – Travel advice

Tuesday, May 13th, 2008

Following the earthquake on 12 May, measuring 8 on the Richter scale, which struck south western China, 92 Kms northwest of Chengdu, the provincial capital of Sichuan province, the FCO are reporting that transport links have been damaged.   Chengdu airport is closed but Chongqing airport has reopened and travellers need to be aware that flights are heavily delayed.  The FCO are advising against all but essential travel to Sichuan given the damage to infrastructure and a warning from Chinese authorities warning about the possibility of aftershocks in the affected regions.  Staff from the Embassy in Beijing and Consulate in Chongqing are currently investigating the situation.  The British Embassy in Beijing contact number for concerned relatives and friends is (+86 10) 51924499.  For those about to travel to China and other countries in the region, a little preparation before you depart in noting down the latest advice from the FCO or tour operator is always a wise precaution and, in the event of being caught up, it is still possible to keep abreast of developments when at your holiday destination if you have access to the internet or television and most holiday resorts should have this.  Tour operators should also be providing their own advice as will the FCO through its website www.fco.gov.uk/travel.  This article is brought to you by travelandinsure.com – specialist in ethical travel insurance.

Theft abroad on the rise

Monday, May 12th, 2008

Though the headlines have concentrated on bags going missing, particularly after the disastrous opening of Heathrow’s Terminal 5, the high incidence of theft abroad goes largely unreported. But it is a growing problem and affects thousands of holidaymakers abroad each year. Generally when we go abroad, our guard is down and this is what the professional gangs and pickpockets look out for. Whilst baggage that is lost whilst under the control of the carrier may be attributed to theft, generally this will be marked down as lost in transit and a claim against the carrier and travel insurance will be fairly straight forward providing that a passenger irregularity report is obtained from the airline. But this is just the tip of the iceberg for the unwary traveller. Many thefts occur as soon as you have picked up your bags and ventured into the arrivals hall. Picking up a hire car is a very common place to be targeted where bags are taken whilst distracted at the counter. Travelling on public transport is another popular target area where jostling can appear harmless, only to find that a purse or wallet has been taken in the confusion. Placing bags under your chair in a restaurant is an open invitation to it being lifted. If you are unfortunate to have any items stolen on holiday, do make a list of the items stolen and cancel your credit cards and travellers cheques immediately. Go to the local police station as soon as possible and insist on a police report. This is an absolute must if you intend to claim on your travel insurance and most policies insist that this should be done within 24 hours of the incident. If you don’t, then you will find your insurer less inclined to pay out. If you lose your passport, then contact the nearest British Embassy, High Commission or Consulate who will be able to issue you with an emergency replacement passport to get you home.

Medical cover for travel abroad

Thursday, May 8th, 2008

Most people taking out a new travel insurance policy are confused by the term pre-existing medical condition.  After all, medical conditions tend to be technically expressed and, if the condition is cured or under control, are often forgotten about over time.  But insurance companies will argue that the medical cover provided by a travel insurance policy is there for emergency cover and is not a substitute for private medical insurance. There are specialist products on the market for private health care and all that travel insurance is covering for is the unforeseen medical emergency that might occur whilst on holiday and provide for hospital care in-country and repatriation if required.  Once back in the UK, patients can then use the NHS or individual private health care plan they may have in place. This allows travel insurance policies to have lower premiums than their private medical insurance equivalent though these premiums do vary considerably by area visited and the much higher medical costs in the USA will see North American destinations more costly than elsewhere.  What travel insurance medical cover does have in its favour though is the wide network of specialist medical assistance companies to call on when an emergency does occur. The big question will always be “will I be covered if I have a medical history and what does that mean exactly?” All policies have similar interpretations but you should read the medical section of a policy carefully before taking out that travel insurance.  A medical history of heart, kidney, respiratory conditions or cancer should always be declared and this may very well be expanded to the medical history of close family members and travelling companions.  An insurance provider may well decline you insurance at this point or may offer to cover you for an additional premium or may even insure you but void any subsequent claims, if related to the declared condition. Certainly you will not be covered if you travel against the medical advice of your doctor and there will be strict rules on when you can travel if pregnant. So do you need to declare? Yes, you do though not all declarations will result in a higher premium but provided you have done so and the insurer has provided you cover, then it will greatly simplify the process if you ever have to make a claim.