Travel Insurance doesn't always cover bankruptcy.. indeed many people with insurance were stranded. The coverage offered by travel agents is included the price, nothing extra to pay, and covers bankruptcy and repatriation costs. This may be specific to the UK and/or Europe, but there is a definite advantage to booking package holidays and flights via an agent. The protection is partly statutory... when you buy a package of services through an agent, including hotel and flights, the legal obligation for delivery falls on the agent. Therefore if the airline, hotel, etc fail to deliver the agent if fully liable. This is mandated by EU law.
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