Major insurer no longer covering SAA travellers due to 'known financial risk'
"We are aware that they could stop operations at any minute because of financial problems."
Following the decision by at least one major travel agency to no longer book tickets on South African Airways (SAA), insurers are saying they can no longer cover travellers who choose to fly on the embattled state-owned airline.
Uriah Jansen from Hollard explains that it is a known fact that SAA is in financial travel.
This is in light of recent strike action at SAA that saw all flights suspended for some time and a subsequent announcement by SAA that their financial position has deteriorated.
On Wednesday, the Minister of Public Enterprises, Pravin Gordhan said his Department is working together with SAA "to urgently formulate immediate actions that will be required to provide support to enable SAA to carry on its business."
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"Normally travel insurance provides default cover," Jansen explains. "Default cover typically means that the entity would completely stop operations due to financial constraints.
"Right not it's not supplier default, but we are aware that they could stop operations at any minute because of financial problems."
Jansen says: "Once something is a known, fact you cannot get insurance for it."
She explains that customers who bought their tickets with SAA before Wednesday's insurance cover will still be honoured.
However, any tickets bought thereafter will not have cover under the financial default benefit.
Jansen notes that the implications of traveling overseas without insurance can be disastrous for individuals.