Make sure your holiday doesn't become a nightmare

How to get the best insurance

The holiday season is gradually easing itself into gear as many take advantage of bargain holidays. Yet for thousands every year, the hope for paradise in the sun turns into the holiday from hell. There are a few practical points worth bearing in mind. They will not save a holiday but they might minimise the misery.

When booking the holiday, check carefully the cancellation provisions. The financial penalties increase as the departure date nears. If you think you may have to cancel it may be better to wait until you are sure you are free to travel before booking.

It is usually best to book by credit card. By this method holidaymakers can secure extra protection. Under section 75 of the Consumer Credit Act 1974, credit card companies are jointly liable if the agreed goods or services, costing at least pounds 100, are not supplied.

This provides the traveller with the option of seeking reimbursement from the credit card company as an alternative to the tour company. The right is particularly useful if the tour operator has gone out of business. It is important to remember that charge card issuers, such as American Express, are not bound by the same obligations although, in practice, they may be prepared to consider compensation as a goodwill gesture.

What protection do the travel regulations provide if the tour operator goes bust?

The Package Travel Regulations, which came into force in December 1992, have increased the liability that tour operators must accept if a holiday goes wrong.The effect of the regulations, subject to a number of exceptions and defences, is that tour operators must now accept liability for the actions of their suppliers, including hoteliers, airlines and excursion organisers.

Additional protection is provided in cases where holiday companies go bust and holiday-makers either lose their deposits or find themselves stranded abroad.

What advantage is there for me if the tour operator is a member of the Association of British Travel Agents (Abta) or the Association of International Tour Operators (Aito)?

All tour operators are covered by the travel package regulations, which aim to protect all holiday-makers. However, both Abta and Aito provide in addition, for holiday-makers booking through one of their members, a procedure for settling disputes short of court action.

Aito operates an independent dispute-settlement service. Abta provides an independent arbitration service to its members' clients. The service is administered by the Chartered Institute of Arbitrators. Abta points out: "It is a simple, inexpensive way to reach a legally binding solution and does not require you to attend court as it is all done by paperwork."

What should I do if things go wrong while I am on holiday?

It is essential that you raise any complaint with the tour representatives at the earliest possible opportunity. The tour operator must be given the chance to remedy any shortcomings as soon as possible. This is because when a breach of contract has occurred the holidaymakers are under a duty to try and mitigate their loss, so the tour-operator must be made aware of any problem in order to have a chance to remedy it. Remember to keep receipts in respect of any expenses incurred in order to establish the loss suffered in any subsequent claim.

What can I claim for?

Usually the law does not provide for an award of damages purely for an injury to feelings, annoyance or any social embarrassment caused by the breach of contract. Damages are usually only awarded for an identifiable financial loss. However, the Court of Appeal has allowed an exception to this principle if the tour operator fails to provide the facilities promised. In one case a tour operator had promised accommodation to its clients for 14 days but in the event provided it for only a single day. The holiday-makers were awarded pounds 250 for general damages, mental distress, inconvenience and loss of enjoyment.

Is there any real difference between insurance policies?

There are several different types of standard policy. If you travel a lot it may be cheaper to obtain season-long or all-year cover. Ensure that the medical cover is adequate. Check that the personal baggage allowance is high enough to cover all losses as the standard cover is sometimes unrealistically low. Delayed baggage is just as capable as lost baggage of ruining a holiday. It is advisable to check how long baggage must go astray before compensation is available to buy replacements.