While the collapse of Thomas Cook received plenty of media attention, the failure of another British-owned travel business here seems to have passed largely unnoticed.

Of course clients of Melbourne-based Tempo Holidays and Bentours certainly noticed. The fate of many thousands of dollars of travel bookings was suddenly up in the air – or down the drain.

Which brings up the always-thorny issue of travel insurance, its cost and what it doesn’t cover. Typically, you are not covered if your tour company suddenly goes broke after you’ve paid a small fortune.

Australians have become blasé international travellers, among the world’s keenest, but the big overseas trip can be the second-biggest single purchase for many people after their home, more expensive than their car.

New cars from dealers come with warranties. If the dealer fails, the manufacturer stands behind the vehicle. More expensive purchases from travel agents don’t.

The trouble isn’t necessarily the travel agents – they are effectively booking agents for the tour companies they pay your money to and tour companies go under from time to time.

The Tempo Holidays and Bentours failure was both. Beyond the trade media and an ABC report, their demise has passed quietly.

The British parent, Cox & Kings, pulled the plug on them on September 19, leaving customers and staff in limbo.

Like Thomas Cook, Cox & Kings is an old travel company, established 1758, but looks unlikely to be around much longer.

The collapse of Thomas Cook ends a proud 178-year history. Photo: Getty

The International Air Transport Association has terminated the company’s licence to sell tickets and suppliers have steadily deserted as the industry heard the drums.

Too bad about the customers left in the lurch. The ABC reported one couple had paid Bentours $40,000 for their trip-of-a-lifetime. They’ve had to write it off.

Bentours and Tempo Holidays are but the latest of many and won’t be the last.

Until 2014, there was a Travel Compensation Fund established and funded by the Australian Federation of Travel Agents.

Then along came deregulation – good ol’ red-tape cutting. There’s so little red tape now, travel agents no longer need a licence.

AFTA administers the voluntary ATAS agent accreditation scheme, but it costs agents money and there’s still no compensation fund.

Given the size of Australians’ travel habit and what’s taken for granted by consumers in other fields, this is rather extraordinary.

With travel insurance not covering the problem, there are a couple of things people can do to protect themselves.

Using an ATAS-accredited agent is a start. If an agent is too cheap or deficient to get the accreditation, there’s a chance there are problems lurking. It’s a small thing to check.

AFTA cancelled Tempo Holiday’s accreditation in August and added it to the list of excluded or restricted suppliers here. 

Second, despite any extra surcharge, pay with a credit card, not cash or direct deposit.

Paying by credit card will give you additional coverage. Photo: The New Daily

ATAS agents have an agent chargeback scheme with Visa, Mastercard and American express. You’ll be covered.

Some travel agents offer their own guarantees against airlines or other travel operators going broke.

Some will pay the tour companies with their corporate credit card however you pay the agent and you are thus covered, but it’s better to be safe than sorry.

As for what travel insurance does cover, it’s a dive into the murky world of general insurance on which the Hayne royal commission briefly shone a light.

It’s messy, it’s confusing to the lay person, there’s some expensive junk about and also good stuff. You have to check.

The insurance industry generally received a rocket from Commissioner Kenneth Hayne and is improving its act, but it’s still up to the buyer to actually go through the tedious document to understand what’s in and what’s out.

As an absolute minimum, no matter how fit and healthy you are, you are a complete mug to leave Australia without full medical cover and generous medical cover at that.

Standard travel insurance, including most complying “free” credit card travel insurance, takes care of it, but this is an area where having the best coverage is wise.

Quite simply, if you can’t afford travel insurance to cover health emergencies, you can’t afford to leave Australia.

The slippery marble ruins in Turkey, the scooter prang in Bali, the appendix attack in Vietnam, the simple trip on the Indian footpath and anything at all involving a hospital in America can wreck an uninsured individual’s finances, not just the holiday.

Injuring yourself on holiday can hurt more than just your health. Photo: Getty

At the extreme – or one stop short of the extreme – a healthy friend suffered a stroke on holiday in New York. The outcome was four weeks in a coma in a New York intensive care unit and medevac home in a private jet. Luckily, the friend had top travel insurance that covered the hundreds of thousands of dollars it all cost.

I personally think there’s a good argument for the government making travel insurance compulsory before allowing a citizen to leave, rather than having hapless broken and broke travellers begging Australian consular offices and embassies for help. Sometimes we need saving from ourselves.

But just buying insurance or relying on credit card insurance isn’t enough. The conditions must be understood.

Having a sister in the travel industry, I hear some of the horror stories.

For example, she’s careful to question clients going on “babymoons” about when they bought their travel insurance.

If they thought of that only when they bought the tickets, it’s too late – the pregnancy is a pre-existing condition and therefore not covered if complications arise.

Beware the “pre-existing condition”.

The point of insurance is to cover the risk of unlikely financial events you otherwise couldn’t afford. The vast majority of people never have to claim on their travel insurance – but everyone needs it. And they need to know what they have.