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F E Smith
F E Smith, Advocate
Category: Law
Satisfied Customers: 10232
Experience:  I have been practising for 30 years.
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I have been affected by the collapse of Low Cost Holidays.

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I have been affected by the collapse of Low Cost Holidays. Although my insurance including cover for insolvency, they have declined my claim on the basis that Low Cost Holidays were not a provider.
The following is extract from their latest communication. Can you confirm if you believe this to be acceptable, or if we should pursue this further.
"We will pay You up to the amount shown in the Policy Schedule for any irrecoverable unused costs and charges relating to third party companies that become insolvent within Your booking, such as accommodation providers, hotels, car hire, ferries, coaches, which You have paid or are contracted to pay.
We have been instructed by your insurer, Mapfre Assistencia, that ‘accommodation provider’ is defined as ‘the operator of an accommodation establishment’ e.g. a hotel and that Low Cost Holidays were not the operator of any accommodation establishment. Accordingly, they take the view that such claims are not covered by this policy."

I disagree completely with what they are saying.

Their reply begs the question as to what exactly Low Cost Holidays did then!

In my opinion, LCH provided the accommodation through a third party.

If they won’t pay up, either take them to the Small Claims Court or preferably, refer the matter to the Financial Ombudsman Service as a complaint and let the ombudsman deal with the matter.

Can I clarify anything for you?

Please rate the service positive. It’s an important part of the process by which experts get paid.

I can still clarify things for you.

Best wishes.


Customer: replied 1 year ago.
Thank you very much for the speedy response. The complaints process is one whereby you have to refer the complaint to the insurer and then if you are still unhappy with their response to the FOS. Do you think that my best argument would be that their definition of an accommodation provider is not included within the policy documentation? And how would you suggest we get around the query regarding WITHIN the booking? I believe that this might be how they try to wriggle out of it, possibly saying that LCH weren't "within" the booking, but only arranged it. If I draft a complaint letter, are you able to check this for me, adding anything "legalistic" you think would be relevant?

I think that is exactly the point. Accommodation provider would be written as “Accommodation Provider” not, “accommodation provider” if it was a defined term.

In the absence of definitions (which always have a capital letter to start) a term is given its ordinary meaning and the ordinary meaning of accommodation provider, in my opinion, is the holiday company.

My suggestion would be to write back to them and asked them where “accommodation provider” is defined in the policy document and where they get their definition and interpretation of it from.

Tell them that will be referring the matter to the Financial Ombudsman Service and that you don’t particularly want to have to wait eight weeks so can they let you know now whether they’re going to pay you out or not so that you can start ombudsman process.

If you can attach your letter of complaint, I can make the odd comment but if it requires major changes, that would be done as a premium service for which there is an extra cost.

Customer: replied 1 year ago.
Attached the letter I propose sending. If there's anything further you think needs adding, do let me know.
Thanks so much for your help so far on this.

I think that letter is absolutely fine apart from a few minor things. Give them a deadline to reply to, failing which you will refer the matter to the Financial Ombudsman Service. However regardless of what the deadline is, you cannot refer it to the ombudsman until 8 weeks have elapsed.

The other thing to do is put the policy number at the top alongside the claim number and also put the date of the policy.

If you bought this through a broker or third-party, you may have a mis-selling claim.

Please don’t forget to rate positive so that I get paid. We can still exchange emails.

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