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If your travel insurance policy covers travel services provider insolvency or financial default, you can be covered if your trip is cancelled, shortened or rescheduled due to your travel provider going bankrupt. Not many travel insurers cover insolvency, but here is a handful that does.
The following is a list of travel insurers who offer cover for travel provider insolvency:
Brand | Cover limit | You can get covered for | Apply |
---|---|---|---|
![]() | $10,000 |
| |
![]() | $5,000 |
| |
![]() | $1,000 |
| |
![]() | $1,000 |
| Get quote |
If a provider such as a tour operator or airline becomes insolvent, there are several ways you may be able to recover your money.
However, there are no travel insurance policies that provide cover if your travel agent becomes insolvent. The only way to recover your money is by requesting a chargeback from your credit card company or being compensated through your travel agent’s insolvency cover.
Minimise your risk before booking your holiday by:
If you are unable to recover your money any other way, some Australian states and territories have programs in place where you can claim compensation for losses to insolvent companies. You can find out more by contacting the ACCC.
Currently in Australia, a credit card chargeback is one of two ways you can get your money back if your travel agent goes broke. This is only because there are consumer protection rules associated with the use of Visa, MasterCard and American Express credit cards.
When you apply for a credit card for a chargeback, your provider will examine the evidence and if they find cause will reverse the transaction, which returns the money paid to your credit card.
As long as you purchased your holiday on your credit or debit card and selected "credit" when you paid, you have a good chance of being compensated for travel agent insolvency.
Common reasons for chargebacks include:
While chargebacks can be a lifesaver, it’s important to remember there are time limits. These limits vary but generally you have between 30 and 120 days from payment to apply for a chargeback.
With only a handful of Australian insurers covering travel provider insolvency and none covering travel agent insolvency, sometimes a traveller’s only recourse is to either use their credit card to pay for their holiday or find a travel agent with insolvency protection.
Before taking out a travel insurance policy, make sure you’ve checked if it covers provider insolvency at the very least.
How do insurers treat insolvency?
Picture: Simon Cunningham, licensed under Creative Commons Attribution-NonCommercial-ShareAlike 2.0 Generic (image cropped)
Picture: Shutterstock
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