Don't become a financial victim of swine flu!

If you're worried your holiday will be cancelled because of the flu pandemic, or you're anxious to cancel it yourself, will you lose money?

The outbreak of swine flu is a massive news story right now as it spreads further across the globe. The Foreign & Commonwealth Office (FCO) has now issued a warning advising against all non-essential travel to Mexico where the pandemic originated.

Clearly, this could be a huge concern for holidaymakers. In fact, this question was recently posted on our Q&A forum asking lovemoney.com readers for help on insuring against cancellation of an upcoming trip to the Dominican Republic should the pandemic worsen.

If you're due to travel abroad you too might be worried that your holiday could be called off. Or, if you've booked to travel to a region already hit by swine flu, you might be keen to cancel it yourself.

So, is there anything you can do to protect yourself against financial loss?

Package holidays

Sadly for some package holidaymakers, several tour operators have decided to cancel flights to Mexico over the next week or so. But, luckily, that doesn't mean you'll necessarily lose the cost of your holiday.

The travel association, ABTA, says that while the FCO advice remains in place, you'll be entitled to alternative holidays, or where that isn't possible a full cash refund. So far so good, but you won't get any additional compensation for inconvenience and so on, as this type of cancellation is beyond the tour operator's control.

Here are the latest steps some tour operators have taken to protect holidaymakers:

First Choice and Thomson

First Choice and Thomson has cancelled all outbound flights to Cancun and Cozumel, up to and including 8 May 2009.

Customers due to travel over these dates, can make a free amendment to their holiday and select a different destination or alternative date up to the same value already booked.

Alternatively, customers will have the option to cancel their holiday, and receive a full refund without incurring any cancellation charge.

Customers due to travel between 9 and 22 May inclusive will also be able to select an alternative destination or date up to the same value as the original holiday.

Thomas Cook and Airtours

Thomas Cook UK has made the decision to cancel holidays departing to Cancun, Mexico up to and including 12 May 2009. The company has said it will do all it can to provide customers with alternative holidays. (A dedicated phone line has been set up for people affected by this decision on 0870 010 1806.)

Holidaymakers who are due to travel between 13 and 22 May 2009 will be able to amend their holiday, free of charge, and choose a different destination subject to availability. Again, this must be to the same value already booked.

Future travel plans

But what happens if you're not due to travel to Mexico for weeks or even months? Your tour operator will decide how far in advance alternatives trips or refunds will be offered if the advice from the FCO persists.

The situation will be monitored, so your tour operator should contact you closer to your departure date if changes to your holiday become necessary.  

Independent holidays to Mexico

It's a different story if you have booked an independent holiday to Mexico with a scheduled airline. While you should be protected if you have booked a package holiday, a scheduled flight may still go ahead. In this case, you might not be able to get a refund from the airline, or receive any compensation for accommodation you have already paid for if you don't want to travel.

Travel insurance

That said, given that the advice is to avoid travelling to Mexico, you may be able to cancel a trip and claim for a refund from your travel insurance policy instead.

You'll certainly have grounds to make a claim if you haven't been able to get any money back from the airline or travel agent. But, whether you'll receive a refund depends on the travel insurance policy itself, and the cover it specifically provides.

Some policies don't cover risks such as pandemics, while with others you may get your money back if the government has advised against travel to a certain country or region, as it has done with Mexico. Above all, make sure you check your policy before you call off your trip.

If your tour operator or travel agent has offered a suitable alternative trip which you turn down, you'll almost certainly find the claim is rejected by your insurance company.

But, if you do take up the offer of an alternative holiday, make sure your travel insurance policy is still valid for the new destination and/or dates.

Credit card protection

Did you know you might be able to claim compensation from your credit card company for a cancelled holiday?

If you paid for the trip using your credit card, and it cost more than £100 (but no more than £30,000), you may be entitled to protection under Section 75 of the Consumer Credit Act if things go wrong.

Section 75 gives you the right to claim against your credit card company if there is a problem with the purchase of a good or service - including holidays. The card provider shares liability jointly and severally with your supplier. In other words, if you're having no joy getting your money back from the tour operator, airline or travel agent, you can pursue your credit card company for financial loss instead.

But you can only claim if the holiday has been cancelled by the supplier because then the contract you have with them has been breached. This protection is very unlikely to apply where you cancel the holiday yourself. 

For more information on how swine flu could affect your travel plans, check the Foreign & Commonwealth Office website.

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