The good news is that ATOL Protection is being extended to include ‘Flight Plus’ holidays, the bad news is that many holidays booked independently or booked direct with an airline will still be unprotected, which means that adding insolvency cover to their travel insurance is still important for many holiday makers.

The Government has recently announced reforms to the ATOL Protections Scheme which is operated by the Civil Aviation Authority (CAA) and provides financial protection for package holidays that include air travel.

ATOL or Air Travel Operators License was established nearly 40 years ago to ensure that holiday makers whose tour operator ceased trading were looked after in resort and brought back to the UK, or if they were yet to travel, they received a refund.

In recent years the way that we book holidays has changed substantially which has meant the number of holidays actually protected by ATOL has fallen and there is a lot of confusion about which holidays are protected.

Under the current regulations ATOL Protection only applies to package holidays including air travel that are offered for sale at one inclusive price. This means that even if you book flights and accommodation from the same company, unless they were advertised for sale at one inclusive price, they would not be ATOL protected.

It is in response to this rather confused situation that the Government has decided to extend the ATOL scheme to include what are known as flight plus holidays, which is great news for UK holiday makers.

From April 30, if you book a flight plus hotel, or a flight plus car hire from the same company your holiday will also be ATOL Protected, as the regulations are being extended to include high street and online retailers where you can choose flights and hotels separately to put together your own ‘package’.

The bad news is that flights or holidays sold by airlines will still be excluded from the ATOL Scheme, therefore if you book a flight plus hotel or flight plus car hire with an airline your holiday will not be protected.

The other thing to be aware of is that booking flights and accommodation through completely separate companies also still falls outside of the ATOL Scheme, so your holiday would be unprotected.

If you have booked elements of your holiday with different providers, or booked direct with an airline adding Scheduled Airline Failure/Dynamic Packaging Cover to your travel insurance policy can help plug the gap and protect the money you have invested in your holiday.

Scheduled Airline Failure/Dynamic Packaging Cover provides additional travel insurance cover to recoup money lost on flight tickets if an airline becomes insolvent before you travel, or recoup the cost of replacement flights home if an airline becomes insolvent whilst you are away. It also provides travel insurance cover for the insolvency or financial failure of other holiday suppliers including hotels and car hire companies.