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How Do I Protect My Holiday?

Piggy Bank

I'm a little bit spooked by reports of travel providers failing recently, but I definitely want (and need) to take a holiday. How do I protect my holiday and my money? Gail Hensworth, Slough

Our Answer:

We all love a good holiday and work hard to be able to afford one. We all need a temporary escape from the rug rats, the rat race and other realities of life. Unfortunately, the current instability of our economic climate means there are risks involved with booking a holiday, but luckily there are three easy steps you can take when booking your trip to ensure that you've got the best possible protection to ensure holiday bliss.

1. Make sure your holiday is ATOL-bonded

The Air Travel Organisers Licence (ATOL) is a financial protection scheme that requires travel companies to contribute to a protection fund - called the Air Travel Trust. In the event of an ATOL registered company becoming bankrupt, the trust is used to refund (partly at least) those who have already paid for their packages, and to ensure that customers on holiday are repatriated.

Companies that are members of the scheme generally have an ATOL logo or banner displayed on their website and marketing publications. Members of the scheme also have their tracking number above the logo. You can use this tracking number on the ATOL website in order to find out more about a company. If you do not see the ATOL logo displayed anywhere, then it's best to ask outright whether or not the company is a member of the scheme. Before purchasing a holiday package ask your travel provider if your holiday is ATOL protected and after purchase make sure that there is an ATOL number on your invoice as it is necessary for claiming.

2. Take out comprehensive travel insurance with third party insolvency

Not all insurance policies are designed for the times we live in. Before you book, take the time before you book your travel insurance policy ready the policy wording to ensure that it includes things like 3rd party insolvency and airline failure. The Superior policy available on offers comprehensive cover for up to £1000 third Party Insolvency, £1000 Scheduled Airline Failure, and up to £5000 redundancy cover. To find out more about this policy click here.

3. Purchase your holiday using your credit card

This step is particularly applicable to purchases made independently of a travel provider. Paying by credit card ensures that you are covered by Section 75 of the Consumer Credit Act of 1974. This law states that if a customer pays for a service anywhere between £100 and £30 000, then the issuer of the card is equally liable should something go wrong. It's a legal protection that ensures you never pay for services that aren't rendered; for instance, a flight ticket from a tour operator that has gone bust.

There are exceptions that you need to take note of. Firstly, if you aren't the one who makes the payment (i.e. if your significant other, child or anyone else does) then, in order for you as the primary card holder to be covered, you will need to be prove that whatever was purchased would've provided you with some benefit. Secondly, you will not be covered if the payment was made using either credit card cheques or cash withdrawn using the credit card. Finally, Section 75 can only cover you if you made your purchase through travel agents or online processors such as PayPal, WorldPay or Google Checkout. Also note that credit card protection does not include repatriation; you will have to make your own arrangements to get back home.

For more information about ATOL, read our Q&A on What is ATOL?

Confused about what constitutes a package read our Q&A on What is dynamic packaging?

For more tips on protecting your holiday read our How To on Protecting Your Holiday.

Essential Travel Magazine Team

Last Updated: December 2011