Company Goes Under, Would-be Travelers Lose a Bundle

[Ed Wetschler]

Today's news:

"14 Westwood Regional Junior/Senior High School students were told that the trip [they were planning to France] had been canceled because the tour company that booked it, Mariden Travel USA of Alexandria, Va., was going out of business."  

The kids had spent months preparing for this, learning about France, saving money, and raising money. Now each one of them is out about $3,700.

[InsureMyTrip]

Wow.  That's incredibly unfortunate.  Poor kids.
This makes me wonder about whether or not they had travel insurance -- and if so, what type?  Many policies do cover financial default of your travel supplier, so the kids wouldn't have necessarily lost all their money.  Financial default coverage varies from plan to plan and different companies handle it differently (some have a waiting period before it kicks in, for example), but it is a travel insurance benefit that's available to be purchased.  The only caveat is that if the company was already in Chapter 11 or something like that when the insurance was purchased; as with any insurance benefit, you can't make a claim on something that was "foreseen," and obviously a company in Chapter 11 subsequently going under would be relatively "foreseen."  But otherwise, assuming the company WASN'T in bankruptcy status at the time insurance was purchased, this type of loss would be very preventable.

[Ed Wetschler]

My understanding of the story is, they did not have travel insurance, and that's what makes this newsworthy. 

[InsureMyTrip]

Ah.  Without a link I wasn't sure what the circumstances were.  It's really such a shame.