Finance expert has issued an urgent travel insurance warning for anyone who has already booked their summer holiday – and says you could lose everything
Martin Lewis said anyone booking a break should make sure insurance is in place now(Image: Image: ITV)
Money-saving expert Martin Lewis has issued a stark warning to anyone who has already secured their summer holiday booking.
In a fresh update, the personal finance guru alerted those who have already paid for getaways with major holiday providers and airlines including TUI, Jet2, Ryanair, Wizz, easyJet and British Airways.
During an appearance on his ITV programme, he cautioned that failing to take one crucial step immediately after booking could leave holidaymakers with absolutely nothing if their travel plans go awry.
With the ongoing conflict in the Middle East raising serious concerns over jet fuel supplies for flights, Mr Lewis warned that in certain situations, those who have booked a holiday but delayed taking out insurance could stand to lose everything.
Mr Lewis urged travellers to purchase insurance the moment they confirm their booking: “The reason you do that is because half of the cover you’re paying for is in case something happens that stops you going before the trip. And if you don’t have the travel insurance place, you’ve got no cover. So, you may as well have it in place. But at this time of year when many people have already booked, I have a slight adaptation, which is this. If you’ve booked and you don’t have it yet, just get it now.
“Get it done as soon as possible.” A Money Show Live viewer called David said: “I booked flights to Australia for a family group of seven to travel in March next year. I took out insurance immediately. One of our group is now pregnant and can’t travel on the dates planned. It costs £5,000 to reschedule, which I’m happy to report the insurance covered.”, reports the Express.
Mr Lewis also interjected on issues for larger groups: “Very quick aside on that, think of who you’re booking for. So, if it’s a family group and one can’t go, they’ll often cover you. But if there’s a large group of friends going, you often all get independent travel insurance. Well, then if one can’t go or and you can’t all go on the trip, it’s only the person who’s who’s got that cover. So, you’d need a group insurance policy so that if one can’t go, you all can’t go.”
During his Money Show Live on ITV, the financial guru responded to an audience member who enquired whether travellers would be guaranteed a full refund, including hotel costs, should their flight be cancelled due to a lack of jet fuel.
Mr Lewis made it abundantly clear that travellers would forfeit their hotel booking costs if they had arranged accommodation separately from flights booked with airlines such as Jet2, TUI, Wizz, Ryanair or easyJet – as they would not be protected under consumer regulations. He confirmed: “No. And I think this is what people need to be very aware of. If you booked a package holiday where you booked everything in one, then under the package holiday regulations and rules and protections generally if your flight went you would get everything back.”
He continued: “And so actually at the moment package holidays give you a certain level of extra security that you wouldn’t get if you did a DIY booking where you bought your hotel and flight separately.”
The explanation for this, he clarified, is that the hotel reservation itself continues to be legitimate: “Because the point is if you lose your flight and you’ve DIY booked, there’s nothing wrong with your hotel.
“The issue is you can’t get there. Your hotel is still there. It’s not faulty. It’s not cancelling. So, you don’t have those consumer rights.”
Should the hotel not be at fault, guests may examine how they’ve made their reservation – though that avenue provides no answer either.
He explained: “So, you would then say, ‘What about using a credit card or debit card protection?’ It won’t work because there’s nothing faulty. And that’s just giving you the same replica rights that you would have with the retailer.”
Lastly, holidaymakers might look to their travel insurance for assistance. Mr Lewis disclosed: “So, you’ then say, ‘What about travel insurance?’ This is the bad bit. We were checking 40 travel insurance policies.
“Of those, only a few would have covered you for the knock-on eventuality of your flight being cancelled due to jet fuel and then your hotel costs.
“Only about three or four and most of those were package bank accounts where it’s linked to your bank account. Only one standalone provider. So we need to be blunt at the moment.
“There is a big risk in those circumstances. If you’re booking, you want something with free or limited cancellation quite short before. So you could just cancel it. You should always talk to the provider.
“The reason this is important to know is if you are in that position once you understand you have no rights and they say, ‘Well, we’ll give you a voucher and you can come back in 6 months.’
“You suddenly realise you’re doing well, not badly, right? If you didn’t have free cancellation and that this is going to be a problem if we get to that jet fuel shortage.
“Government are saying there isn’t one at the moment and they’re working on consolidating flights and doing things so there won’t be one, but people’s hotel costs if they book separately and other knock-on costs are potentially at risk.”
Insurance via bank account
Another viewer, Michelle, enquired: “What if your holiday insurance is direct through your bank account? When I’ve told them I’m going away, they said I don’t need to tell them. Does this mean if something happens before I go, I’ll still be covered?” Mr Lewis explained: “Effectively, what you’ve got is an ongoing rolling annual travel policy that keeps auto renewing without you doing everything. So, let me just take this in a bit more detail because people often ask me, ‘What does ASAB actually mean?’ Well, if you’re booking a single trip policy, a policy just for one trip, then you get the insurance as soon as you book. to cover a specific future date, say the 10th to the 17th of August.
“You pay for that. Once you’ve paid for it, you have the travel insurance. So, if anything happens from that point onwards, you’re covered. No problem.” Regarding an annual policy, he stressed that policyholders must be fully aware of precisely when their cover begins: “On an annual policy, if you don’t have cover, you need to start it ASAB. You need starting not your holiday dates. You need that annual cover starting now. Or if you start it the date you go on holiday, you’re not covered. So, it’s all lost. Now, if you’ve already got cover in place and it lasts until after the holiday ends, no problem. Well, effectively, Michelle, that’s you. You’ve got an ongoing rolling annual travel insurance policy provided by your bank. So, you’re fine. You don’t need to notify them. You’re always covered unless you go over the maximum number of days in a year or on a trip.
“If you have an annual policy that covers you now, but let’s say you’re going on that trip and your annual policy ends on the last day of July, what you need to do is get a new annual policy that starts the day your old policy ends. Now, if something were to happen now to that holiday in August and you’ve got the policy that ends before the holiday starts, the vast majority of annual policies would cover you even though the policy is after the close date because the event happened while you’re still within the term.”
