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Travel insurance and your rights:

You've packed your best togs, waved goodbye to the office and watered the plants. What could possibly go wrong with the holiday you've been looking forward to for months? While mercifully rare, problems do occur en route to and at our travel destinations and they can often be beyond our control.

It's crucial to take out travel insurance but make sure you shop around rather than buying a policy from your travel agent as these are more likely to be expensive. Check the terms carefully and make sure you are aware of what is covered and what is not. Relying on free travel cover provided by your credit card may not be enough, particularly if you require medical treatment or are going skiing or scuba diving. Some things are impossible to claim for and others will be covered by travel industry schemes.

Here's what to do if there is blot on your perfect holiday landscape.

I need to cancel my holiday

For holidays where you have yet to pay, you will find that most contracts will bind you to some sort of payment if you have to cancel. The amount will depend how close to the departure date you are; the later it is the more it will cost. At the very least you will lose your deposit. If you have paid for your holiday up front, unless the operator's terms and conditions specify otherwise, there is no obligation on it to refund any money in the event of you cancelling your holiday. However, most travel insurance policies will provide cancellation cover - but check the terms as the cover may only apply in certain circumstances such as bereavement of a close relative or specific illnesses. You can also cancel without penalty within seven days of agreeing the contract if you have booked over the internet, via interactive TV or on the telephone. But this doesn't apply to advance flight or rail bookings where more advantageous prices have been offered.

I need to switch travel dates

Expect to pay something for altering the travel contract. This amount will increase the closer you are to the original departure date. The seven day rule covered in 'I need to cancel' also applies for internet, TV and phone bookings.

I've lost my ticket

Yikes. It's is not as easy as you might think to reissue flight tickets. The airline is likely to ask you to pay for a new ticket and only refund the old one when it has expired without being used. Alternatively, it may ask you to pay administration costs only on the understanding that if the lost ticket is used then you will be liable for the full price of the new ticket. If you booked online for a 'ticketless' service then keep a careful note of your unique booking reference number.

I've missed my flight

With scheduled flights you can usually be put on stand-by. Expect to pay an administration fee. Budget airlines will have less flexibility but the check-in staff should do their best to help. With charter flights, you could be out of luck altogether and will need to contact your holiday operator or the airline desk staff to work out the best solution. Most travel insurance policies include a section providing cover in the event of missed departure but there may be conditions so keep notes over any delays and keep paperwork for any new tickets.

My flight has been changed, delayed or cancelled

The airline or tour operator should let you know the reason for the delay and the estimated length of the wait. You may be offered vouchers for refreshments or in extreme cases overnight accommodation. Don't leave the airport unless the airline staff give the OK. The airline is not obliged to offer cash compensation for delays, even if you incur genuine financial loss as a result. Your travel insurance may provide cover - check before you travel. If your airline decides to cancel the flight route for any reason then it must offer an alternative destination, an alternative departure date or a full refund.

My cruise has been cancelled

Cruises now generally fall under package holiday laws and as a result, passengers can expect compensation if their dream trip is ruined or cancelled. In recent cases, the cruise company has provided a full refund to all passengers, compensation of £40 plus 25% of the cost of their booking as a credit against their next booking, valid for specific time. If you feel you are due more than that then expect a lengthy court case.

I've been 'bumped' off a flight

Lots of airlines deliberately overbook their flights on the basis that not everyone turns up. But if they do all turn up and you are told you cannot take the flight you booked then it's tough luck as the IATA terms on conditions on the back of every ticket state that airline does not guarantee to fly passengers at the time or date indicated. The EU has tightened up on the compensation which must be offered in these cases and if you have checked in on time with a confirmed reservation then you can demand a full refund or a seat on the very next flight. You can also opt for an alternative flight with cash compensation. The airline must provide you with a free telephone call to your destination, free meals while you are delayed, and free hotel accommodation if you are delayed overnight.

My holiday operator has gone bust

It's unusual but not unheard of. The majority of travellers get their money back if the firm takes a dive before they travel. What you are unlikely to get is any additional compensation for losing your holiday. To ensure that you have the best chance of a refund in these circumstances, ensure that your operator is a member of one of the accredited travel organisations which provide financial protection if it goes out of business. If you are booking through a travel agent, ensure that it is a member of the Association of British Travel Agents and Tour Operators (ABTA) or the Travel Trust Association (TTA).

If your operator is not a member of an organisation that will refund you then make sure you get additional cover via your travel insurance policy. It is not usually included automatically. Flights which are part of a holiday package should be covered by the ATOL (Air Travel Organisers' Licensing) protection scheme. If the ATOL symbol and licence number don't appear on your flight confirmation slip or ticket then find out why not. If you buy your ticket direct from the airline then it will not carry the ATOL symbol.

All UK-based holiday companies which provide package holidays (defined as including accommodation, transport and other tourist amenities) have a legal obligation to ensure that their customers will receive full compensation in the event that their business fails. If you are dealing with a small company, for instance to rent a villa, then they may not provide cover. It is best to ask before you book.

They lost my bags

If you are the last one waiting empty-handed at the luggage carousel then head for the information desk and fill out a Property Irregularity Report (PIR) form. Make sure you get keep a copy. Compensation claims must be made within 21 days, or seven days in the case of damage. While you wait for your bags, most airlines will compensate you up to £75 for essential items such as toiletries and a change of clothes until your luggage shows up. Keep all the receipts. If your luggage is lost on a flight home then you are unlikely to get any compensation but the airline with deliver your bags to an address of your choice. Compensation for lost or damaged luggage isn't generous and all claims are calculated on weight rather than value. Travel with valuables in your hand luggage. Your travel insurance should provide cover but will probably take into account any compensation paid by the airline.

Our hotel is not the one we booked

Your options depend on the terms of the contract with the holiday company. If your hotel was guaranteed then expect compensation. But some contracts specify a class of hotel rather than a specific venue. Check before you book.

My money/tickets/passport/possessions have been stolen