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Does travel insurance cover insolvency?

Does travel insurance cover insolvency of an airline, travel agent or accommodation provider?

cancelled flights on an airport departures board
Last updated: 06 May 2020

Need to know

  • Only 22 out of 132 travel insurance policies we reviewed cover insolvency of an airline
  • No travel insurance policies we review cover insolvency of a travel agent
  • If your travel insurance won’t cover you, you’ll need to process a credit card chargeback

Travel bans introduced to curb the spread of COVID-19 coronavirus have brought travel to a standstill across the globe. 

This is having a devastating impact on the travel industry, such as Virgin Australia's decision to enter voluntary administration.

Virgin is still operating, but it's at risk of insolvency. This may mean you're worried about losing any bookings or credit you have with the airline. 

If you've paid money to an airline or travel provider that becomes insolvent, can you get your money back?

Does travel insurance cover airline insolvency?

Most travel insurers exclude cover if your airline or travel providers, such as hotels and cruise lines, become insolvent. 

In our travel insurance reviews, only 22 out of 132 policies cover insolvency of a travel provider. The cover is usually limited to between $1,000 and $10,000.

Does travel insurance cover travel agent insolvency?

None of the insurers that we review cover insolvency of a travel agent and we're not currently aware of any insurers that do. If you know of an insurer that does cover travel agent insolvency, let us know in CHOICE Community.

Otherwise, see our advice below.

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How to get your money back if your airline or travel agent goes broke


If you don't have travel insurance, or your policy doesn't cover insolvency, then you may need to process a credit card chargeback. If you paid by credit card or Visa or Mastercard debit card, then you may be eligible for a chargeback.

You'll need to check the conditions with your card provider. There is usually a time limit for processing a chargeback, depending on how long ago you paid for the service. See our advice on credit card chargebacks for more information.


If you paid using PayPal, you may also be able to get your money back with PayPal buyer protection.

If none of these options work for you, then you'll need to register with the company's external administrator, where you'll likely join the queue of unsecured creditors with other consumers.