Are you prepared for a bankrupt tour operator while on vacation? While the vast majority of my customers purchase travel insurance, some are reluctant. While there’s lots of reasons to purchase travel insurance, one situation recently happened. A tour operator went out of business.
Bankrupt tour operator
In case you hadn’t heard, the British tour operator Thomas Cook filed for bankruptcy. It affected 600,000 travelers around the world! Here’s an article on what happened. Because this occured in the UK, travelers are protected by British law in a way American consumers certainly would not. Here’s an article describing the differences.
There’s precedent for this in the US. Back in 2003, a Far and Wide Travel abruptly filed for bankruptcy. Many of their travelers were stranded and/or lost money. And just recently JG Worldwide filed for Chapter 7 bankruptcy.
So what should we learn from this?
- Never pay money directly to a travel agent. Make sure the funds go directly to the travel supplier via the travel agent.
- Always pay by credit card – this affords you some protection depending on the card.
- Always purchase travel insurance. While a bankrupt supplier certainly ruins a planned vacation, there’s no reason to lose all your money or be all alone in trying to get back home. With a proper travel insurance product, you’re covered.
- Learn if insurance even covers your situation. Companies like Allianz cover only financially viable companies. Here’s their list of companies that they will insure.
Many of Far and Wide’s customers wished they had purchased insurance from a company like Allianz. But wishing doesn’t do any good.
Travel insurance – live and learn
For what it’s worth, we always purchase travel insurance when we travel – typically Allianz’ Journey plan. Not only are we covered for a bankruptcy but also for medical reasons as well. You never know.
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