Is travel insurance essential? What are you actually covered for?

Two questions that need quick answers when a crisis, schedule disruption or cancellation impact on well-made, and no doubt much looked-forward to, travel reservations.

This week alone has thrown up a variety of worldwide ‘happenings’ that have impacted on Nomadic Thoughts’ client travel itineraries. Adequate protection is essential as, when a travel itinerary is amended or cancelled, clients rightly expect answers to (a) how best to deal with a situation; (b) how much dealing with the situation will cost; (c) who will pay.

Examples include North America, which has almost ground to a standstill as a big freeze sees regions in the Midwest drop to below -25C, and a host of new ‘lowest ever’ temperature records set in Alabama, Arkansas, Georgia, Maryland, Michigan, New York, Ohio and Tennessee.

In Indonesia the Mount Sinabung volcano, North Sumatra, erupted over 50 times on Saturday spewing gas, lava and ash as high as 4,000 metres (13,000ft).  As 20,000 people evacuate their homes the impact on local roads and airports is bringing memories of Iceland’s Eyjafjallajokull eruption – which so effectively closed European airspace in 2010.

Adverse political activity can be just as damaging to well-made travel plans. In this week’s case Thailand is moving to centre stage with a potential shutdown on ‘Black’ Monday, threatening to gridlock roads, railways and airports.

In addition to ‘at destination issues’ the possibility of clients being unable to travel due to their own health, sickness or at-home weather also impacts on whether a person has the appropriate insurance in place.

The question of a travel supplier’s financial security is also hugely relevant. For example the ratings agency Moody’s has, today, downgraded Qantas Airways’ senior unsecured rating to junk. Which highlights the issue – if an airline, hotel or ground service supplier goes bust, are you insured?

On the basis that this week we have had to re-emphasise the importance of having personal travel insurance – as well as the importance of having relevant cover when booking through Nomadic Thoughts – I am posting this blog to assist in simplifying the different travel insurance options.

In simple terms – you should (a) have personal travel insurance, to cover you for anything that can go wrong whilst on a trip, (b) book a travel service/trip with a reputable company, that offers you financial protection, as well as cover under their own professional indemnity insurance.

(a)    Personalised travel insurance is an essential pre-requisite to booking a Nomadic Thoughts holiday.

You (the client/travellers) have to purchase this as a separate element to your holiday. Essentially it covers you for any issues you have on your trip.  You can buy travel insurance at many retail outlets, but you may already have cover in place through household insurance, banks, credit cards etc.

Personally speaking, although the vast majority of travel insurance products give you peace of mind and financial compensation for travel delays, disruptions, thefts etc. I believe the only two essential elements are (i) cover for an emergency medical situation, including emergency repatriation; (ii) cancellation or curtailment.

(b)   Travel Company’s Insurance – which gives you both financial protection and peace of mind when booking through a reputable travel company, travel agent and/or tour operator.

The level of protection you, as a client/traveller have depends on (i) how you book the trip; (ii) what combination of elements are included in the trip.

For example when travelling with Nomadic Thoughts – in addition to our personal service, product knowledge and trusted line of communication with our local ground representatives – you (the client) are protected by our ATOL Licence (Air Travel Organisers Licence) when choosing a Nomadic Thoughts ‘packaged holiday itinerary’. This not only gives you the necessary financial protection but also guarantees that the services you have paid for will actually be provided.

The important issue being that EU law insists that when a travel organiser invoices a client for a flight and minimum of one extra service, it has to be ring-fenced as a ‘package’. Which in turn requires the travel organiser to have an ATOL Licence in place – thereby safeguarding clients’ money in the event of financial failure.

Should we be unable to offer you the holiday you booked (i.e. due to adverse weather, ash cloud or political unrest, as mentioned above) we are duty bound to offer a full refund, or make alternative arrangements.

Certificate: remember that when you book an ATOL bonded trip you will receive an ATOL Certificate confirming as much. If you do not – you are not covered.

In addition to offering protection under our own ATOL, our separate ‘Professional Indemnity Insurance’ also covers clients for up to £1,000,000 on any one claim, safeguarding you whilst travelling abroad under the services and supervision of our local suppliers. Similarly our comprehensive ‘Public/Products Liability Insurance’ comprehensively covers clients up to £2,000,000.

To conclude: when travelling with Nomadic Thoughts (Worldwide Travel) you can do so with complete peace of mind. In contrast, if you (as the client) book services through a local, or non-licensed supplier – whether direct or on-line – you are taking full responsibility for your self-booked services without relevant tour operator protection, cancellation protection or financial security.

For example if you self-book a trip and are injured in a local transfer vehicle you are obviously on your own. On our trips all local travel services are covered by Nomadic Thoughts’ insurances and will benefit from our local ground colleagues’ support.

In addition you might like to see our list of ‘useful Links’ that flags up a host of useful pre-departure web-sites. Similarly please do not hesitate to contact either myself of Nomadic Thoughts if you require any further information.