Collapse of XL, the third largest holiday company in the UK

Commenting on the collapse of XL, the third largest holiday company in the UK, Andy Leadbetter, managing director of insurance and home services at moneysupermarket.com, said: "Another huge blow for holidaymakers affecting 285,000 XL customers, hot on the heels of Zoom Airlines' collapse.

"The 50,000 Brits abroad now on XL package holidays will be protected under the ATOL licence and will be contacted and flown home; for customers who have not yet travelled I recommend you contact your travel agent, or ATOL if you booked directly, for advice.

"However, 25,000 flight-only customers are unfortunately not protected and will need to contact the Civil Aviation Authority to make arrangements to get home if overseas. Of the 200,000 advanced bookings, those who paid by credit card will be protected by section 75 of the Consumer Credit Act for payments of £100 to £30,000. Those who paid by Visa debit card should also get redress via the Visa chargeback scheme and should contact their card issuer. It's also important to scour the small print of your travel insurance policy to see if airline insolvency is covered.

"For future holiday plans, it's crucial to get your travel insurance as soon as you have booked your holiday. But for the one in seven (14 per cent) British holidaymakers who admit to never taking out travel insurance the 'it-won't-happen-to-me' mentality won't help replenish your wallet if you find yourself out of pocket for events beyond your control.

"Without adequate insurance getting compensation for disrupted travel plans could be incredibly difficult. Always check the small print to see what you are and aren't covered for. At a time when consumers are watching every penny, and holidays away are becoming more difficult to afford, it's important to ensure you don't lose out."