Insurance Protection on Package Holiday Refunds Extended

Ian Lewis[1]

Ian Lewis

Money Savings Advice Insurance protection on package holiday refunds extended

The U.K.'s aviation regulator has announced an extension to ATOL protection for credit note refunds for would-be travelers until March.

The Civil Aviation Authority's extension of the insurance pledge means that customers whose holiday bookings are canceled due to COVID-19 before the end of March will receive full ATOL protection on refund vouchers.

This means that would-be travelers have financial protection on the credit notes if the travel company were to fail.

ATOL protection is a government-run insurance scheme that protects holidaymakers against financial loss on package holidays sold by the scheme's members. A small number of flight-only deals are also covered.

We recognize that changes to government restrictions on travel have an unprecedented effect on ATOL holders and consumers with ATOL protected bookings. In light of these circumstances, we have extended ATOL protection for refund credit notes.

Said, Paul Smith, Consumer Director at the U.K.'s Civil Aviation Authority (CAA), which oversees ATOL

The CAA previously extended ATOL Protection for credit note refunds in September 2020. Speaking about the latest extension, Mr. Smith added:

This will allow for travel companies to offer their customers refund credit notes in good faith and mean that consumers will not be at financial risk if they choose to accept a refund credit note rather than a cash refund.

Consumer rights mean that all customers whose holiday or flights have been canceled due to the pandemic are entitled to a full cash refund.

However, the new CAA assurances mean that any would-be travelers who choose to receive their refund in the form of credit notes will have complete ATOL Protection on those vouchers' value until 31st September 2021.

Under the guidelines, the CAA stresses that customers also have until the September deadline to change their minds and convert credit notes back into cash.

Under current lockdown rules in England and Scotland, all travel out of the U.K., except for a small number of legally permitted reasons, including work or study abroad.

A growing number of foreign countries, including many popular package holiday destinations, such as France, Spain, Italy, and the U.S., have placed travel restrictions on British passengers over fears they could be carrying new strains of the virus already present in the U.K.

As the travel slowdown grinds on into the new year, many major package holiday providers have chosen to cancel bookings preemptively. On 5th January, Virgin Holidays canceled all of its package holiday bookings until mid-February, following similar moves made earlier in the new year by Jet2, Tui, and Thomas Cook.

In June, the International Air Transport Association, which represents 82% of the world's air traffic, predicted it could take until 2024 for the global aviation industry to bounce back from the disruption caused by the pandemic.

To check whether a booking is ATOL Protected, customers can either look at their booking documents or search for the travel company they booked with on the ATOL Protection database.

Money Savings Advice Author Ian Lewis

Ian Lewis

Ian Lewis is one of our specialist financial writers. Ian has over 15 years of financial writing experience, having worked for some of the largest financial publications in the UK covering topics from mortgages, equity release, loans and financial claims, to name a few.

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