Smart Money: Good, flexible insurance policy is best protection for your holiday - Jenny Ross

Q I noticed that a holiday I booked some time ago has now reduced in price by a couple of hundred pounds. Am I able to cancel and rebook or ask the firm for a refund for the difference?

Answer: It’s a great feeling to look up the price of a holiday you’ve already booked to find the cost has risen considerably. It’s vindication and reward for forward planning.

But it’s also galling to see that the opposite has occurred – and that you may have forked out more than you needed to.

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It’s also, in theory, counterintuitive. We're often told to get in early to avoid disappointment when it comes to booking holidays.

. Picture: PA Photo/Alamy.

The fact that either of the above scenarios are plausible is down to the fact that travel companies and airlines are constantly tinkering with their prices (dubbed by firms as "flexible pricing”) or putting on “flash sales”.

Some travel providers and airlines will also try to instill panic in customers to encourage them to act quickly.

The months following the relaxation of travel restrictions imposed during coronavirus have been littered with holiday firms warning of deals being snapped up at particular prices, when in reality they weren’t at all.

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That they then lower their prices, after some customers commit to paying a higher rate, should sadly come as no surprise.

Ultimately, airlines are seeking to find the right balance between keeping the cost of the flight low enough so that you choose them, while also making sure that they’re still making enough money to make the flight cost viable.

So, the short answer to the question of whether you could get a refund on your holiday is: probably not.

Firms will argue that, since you booked early, you had the widest range of options available to you (before certain flights sold out, for example, if your destination is particularly popular).

That you chose a fare that’s turned out to be one of the most expensive is bad luck.

Whether or not you are able to cancel depends on the company you booked through, and whether their terms and conditions allow you to.

Some providers are more flexible than others, so you will need to check that carefully.

There may well be a fee to cancel, and cancelling for personal reasons may well involve a termination fee.

That fee is usually a percentage of what you paid, and can increase the closer you get to your holiday – so you’ll have to weigh up whether the losses you suffer in cancelling are worth trying to rebook at a lower price.

Most firms will operate a system where your money is frozen once you’ve paid the cost of your flight or holiday if you’ve booked a package.

That means you’re protected from any potential price rises, but it also prevents you from receiving any type of refund if a better deal comes along after you’ve booked.

Travel insurers usually don't cover cancellation claims where the cause is a “disinclination to travel” – or a change of mind about the journey.

Despite travel restrictions loosening, booking still carries risks – as passengers grounded at airports across the country can attest.

The best way to protect yourself is to choose a good, flexible insurance policy.

Jenny Ross is Money Editor for Which? magazine – www.which.co.uk

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