AITO confident of reinstating financial protection pledge
AITO says it's confident it will shortly reach an agreement with major insurance companies to enable it to reinstate its 100% financial protection guarantee to customers.
The association suspended its guarantee on August 1 after travel insurer AmTrust voided a policy on the grounds of 'material non-disclosure' by Skiing Europe, a former AITO member, which had left hundreds of school children out of pocket when their holidays were cancelled at the last minute. AmTrust has since withdrawn from the travel insurance market and Skiing Europe is being investigated by police and Trading Standards.
AITO's lawyer has written to other major insurance companies asking them to agree to revised wording that protects the consumer in such instances. "To date we’ve had confirmation that one of the insurers, Travel & General, meets all the requirements and offers robust cover; its policy would have been triggered in the case of Skiing Europe," said AITO spokeswoman Sue Ockwell. "We anticipate that we will reach agreement with the other main insurers within a few weeks."
At the same time, AITO is calling on the Government to close a loophole in the Package Travel Regulations which allow tour operators to insure against failure as a way of protecting clients' money. "It would be n the best interests of the consumer for the Government to take action," said Ockwell. "In the meantime, if we can get all insurers to agree to revised wording that protects the consumer in such instances, that will at least act as a sticking plaster over the boil and will offer consumers and the industry short-term comfort. We will continue to lobby to seek Government action for longer-term reassurance."
AITO chairman Derek Moore added: “We hope very much that the travel industry as a whole will back our call for Government action, as this situation also affects many hundreds of companies in the wider industry generally – far more than it does AITO.
“AITO has just written to remind its 130 AITO Specialist Travel Agents that all 150 AITO companies still offer their own 100% financial guarantees – it’s simply AITO’s strapline that has been temporarily withdrawn. In our view, AITO is being whiter than white in withdrawing its strapline.
"It has come as a shock to everyone in travel that the insurance company in this case was seemingly able so easily to wriggle out of its obligations and to void its policy, despite having taken premiums for several years. We believe that this action is totally contrary to the aims of the Package Travel Regulations and that it tarnishes severely the reputation of the insurance industry.”
By Linsey McNeill
Linsey McNeill
Editor Linsey McNeill has been writing about travel for more than three decades. Bylines include The Times, Telegraph, Observer, Guardian and Which? plus the South China Morning Post. She also shares insider tips on thetraveljournalist.co.uk
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