State will pay out over holiday collapse

Another insurance company has decided to amend its travel policies in the wake of the collapse of an Auckland-based travel wholesaler last week.

State Insurance confirmed yesterday that it would honour policies taken out by travellers caught in the collapse of Sun Travel.

Sun was sold this week to rival company Go International, after it collapsed with debts of around $2.6 million.

Most of the company's customers will not have to pay twice for their holidays as they can claim on insurance, through their credit cards, or the Travel Agents' Association.

However, some travel policies do not cover the possibility of a wholesaler collapsing.

Southern Cross agreed in the week to waive its rules but only in the case of Sun Travel, while State has decided to amend its rules permanently.

Parnell-based travel shop Adventure Travel said yesterday that only two of its 50 customers now looked as if they might be out of pocket.

"We are pleased that State plans to honour its travel policies, along with Mike Henry Insurance and Southern Cross," director Peter Gibbs said.

Although Adventure Travel is not a direct creditor of Sun, it had many customers who were affected.

The Travel Agents' Association expects to pay out about $800,000 as a result of the collapse - the biggest payout in its 38-year history.