ATOL protection: What does it cover and will it get you a refund on your package holiday?

Compensation for canceled package holidays could change with a shake-up of how the ATOL rules work – but research shows consumers don’t understand the rules we currently have.

Vacationers are unsure of their refund rights and entitlements regarding holidays and replacement flights, according to the Civil Aviation Authority, which oversees the ATOL scheme.

The CAA, which is consulting on increased ATOL funding, also noted that “consumers lack knowledge about the key elements of ATOL protection”, particularly regarding compensation in the event of airline failure. .

So what is ATOL, and what does it cover and what doesn’t it cover?

Are you covered? Consumer protection is in place for holidays booked with failing travel providers – but it all depends on the type of transport involved

Everything you need to know about ATOL

ATOL stands for Air Travel Operator License. ATOL protection covers people taking a package holiday with a flight involved.

The scheme was set up in 1973 to prevent people traveling abroad from being cut off if their holiday business went bankrupt. It promises vacationers a refund or replacement trip if a vacation travel business fails before their trip begins.

If a package holiday company fails during a trip, ATOL protection pays for accommodation and can handle reimbursements for things like car rental and return flights.

>> I waited THREE YEARS to get my money back for a Thomas Cook holiday – is there any hope?

What is ABTA?

If you’re wondering what protection you get for booking a holiday that doesn’t involve flying, that’s where ABTA comes in.

ABTA, or the Association of British Travel Agents, protection covers package holidays, including travel by road, sea or rail.

If your package holiday company goes bankrupt, ABTA will pay for lost money for accommodation and travel, including transport back home if you find yourself stranded overseas.

However, ABTA advises that package travel for less than 24 hours or for business travel may not be protected.

What is not covered by ATOL or ABTA?

Lots of things – for example, if your luggage is lost or stolen, if you need medical treatment abroad, if you have to cancel a trip or if there are delays that result in additional costs for you.

That’s why it’s always important to have the right travel insurance, even if your holiday is covered by ATOL or ABTA.

>> Read our guide to getting the right travel insurance policy

Do-it-yourself package holidays are also not covered by either scheme.

Exception: ATOL will generally not pay compensation for a canceled flight unless it is part of a package tour and the operator has gone bankrupt

A major exception with ATOL is that it doesn’t just pay for canceled flights, only air travel as part of a vacation package.

The CAA said ATOL only covers flight issues that don’t involve the operator’s downfall in rare circumstances, such as “on flights where you pay for your ticket in installments or don’t receive your ticket immediately after paying”.

If you booked a flight through a travel agency, this may be protected by ATOL if the company goes bankrupt, but it depends on the circumstances.

ATOL said: “Your travel agent should clearly indicate whether your flight-only booking is ATOL-protected before you book. If you purchase an airline ticket from an airline or travel agency and receive a valid e-ticket in exchange for payment, the ATOL program does not cover this.

However, separate package travel laws entitle you to a refund if you book a flight with a package travel company which is then cancelled.

Travel insurance can help fill the gaps in ABTA and ATOL protected holidays.

If you book travel or accommodation using a credit card, Section 75 protection means your credit card company can pay for cancellations.

However, this only works on amounts between £100 and £30,000, and the cancellation cannot be your fault.