6. Financial default of a travel company
If the airline, tour operator or cruise line you’ve booked a trip with goes bankrupt, and stops providing service, you could be in trouble. A portion of your trip could be lost.
If it happens and you don’t have travel insurance, you could be out the part of your trip that is booked with the bankrupt carrier.
Travel insurance, if purchased within a certain amount of time of you initial trip deposit, will provide coverage for financial default.