Policies rarely cover airline failure

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Travel insurance

Nearly half of travel insurance policies don’t include protection against airline failure, says independent financial information company Defaqto.

This warning comes hot on the heels of the recent news that Iceland-based budget airline Wow ceased operations, leaving passengers stranded overseas and confused about their rights.

Defaqto has cleared up some of this confusion, stating that airline failure is not covered as standard on over two-fifths of travel policies as the risk is usually relatively small. This is likely not what those involved want to hear as it could mean that many passengers will not be compensated.

It analysed the 1,103 single-trip and 1,125 annual policies available in the UK and found that only 48 per cent of annual and 47 per cent of single-trip policies include ‘scheduled airline failure’ as standard.

This underlines the importance of insurers being clear about what they are offering and for insureds to do their research and read the small print. “You should always read the policy. It is the most boring half hour of your holiday, but probably the most important,” Brian Brown, Head of Insight at Defaqto, warned passengers.