TICO Travel Compensation Fund 5 — Questions and Answers
Question 1: Which type of travel purchase is specifically EXCLUDED from Travel Compensation Fund coverage?
- Pre-paid hotel packages sold by a TICO registrant
- Cruises booked through a registered Ontario travel agent
- Airline tickets purchased directly from the airline's own website (Correct answer)
- Tour packages sold by a TICO-registered tour operator
Correct answer: Airline tickets purchased directly from the airline's own website
Purchases made directly from airlines or other suppliers—not through a TICO registrant—fall outside the Fund's scope.
Question 2: How are contributions to the Travel Compensation Fund primarily collected?
- Through a levy on every airline ticket sold in Ontario
- Through annual registration fees paid by TICO registrants (Correct answer)
- Through a percentage of each consumer's travel booking cost
- Through Ontario government tax appropriations
Correct answer: Through annual registration fees paid by TICO registrants
TICO registrants pay annual registration and renewal fees, a portion of which funds the Travel Compensation Fund.
Question 3: A consumer paid a $4,000 deposit for a European river cruise. The travel agency went bankrupt before departure. The consumer also had a $500 trip-cancellation insurance policy. What amount can they claim from the Travel Compensation Fund?
- $4,000 — the full deposit, regardless of insurance
- $3,500 — the deposit minus what insurance already paid
- $500 — only the portion not covered by any insurance
- Nothing — insurance must pay first and the Fund is a last resort (Correct answer)
Correct answer: Nothing — insurance must pay first and the Fund is a last resort
The Travel Compensation Fund operates as a last resort; consumers must first exhaust insurance and credit card chargebacks before a Fund claim is accepted.
Question 4: A group of 12 travelers all booked through the same collapsed TICO registrant. Each traveler lost $8,000. What is the maximum total the group can collectively recover from the Travel Compensation Fund?
- $10,000 — one single cap applies to the entire group
- $80,000 — the $10,000 per-person cap applies individually to each (Correct answer)
- $96,000 — the full $8,000 loss per person
- $120,000 — a separate group-booking multiplier applies
Correct answer: $80,000 — the $10,000 per-person cap applies individually to each
Each traveler is entitled to up to $10,000 individually, so 12 travelers can collectively claim up to $120,000 — but since their loss is only $8,000 each, they recover $96,000 total.
Question 5: Which best describes the Travel Compensation Fund's relationship to TICO's Errors & Omissions insurance requirement?
- They are the same product sold under two different names
- E&O insurance protects consumers from agent negligence; the Fund covers registrant insolvency (Correct answer)
- The Fund replaces E&O insurance for registrants with fewer than 5 employees
- E&O insurance automatically triggers a Fund claim upon any payout
Correct answer: E&O insurance protects consumers from agent negligence; the Fund covers registrant insolvency
E&O insurance covers professional mistakes and negligence, while the Travel Compensation Fund specifically addresses registrant financial collapse.
Question 6: After TICO receives a Travel Compensation Fund application, what is a mandatory step before any payment is issued?
- The consumer must appear before an Ontario court
- TICO verifies the claimant booked through a TICO-registered seller and confirms the loss (Correct answer)
- The consumer's travel insurer must deny the claim in writing first
- The registrant's bank must co-sign the claim approval
Correct answer: TICO verifies the claimant booked through a TICO-registered seller and confirms the loss
TICO must verify registration status and the legitimacy of the financial loss before authorizing any Fund disbursement.
Question 7: A consumer books a domestic Ontario trip through a TICO registrant. The registrant ceases operations two weeks before the trip. The consumer rebooks directly with the hotel at a higher rate. Can the consumer claim the price difference from the Travel Compensation Fund?
- Yes, the Fund covers the incremental cost to obtain equivalent replacement travel
- No, the Fund only reimburses the original deposit paid to the registrant, not rebooking premiums (Correct answer)
- Yes, but only if the rebooked trip departs within 48 hours of the original departure
- No, domestic Ontario trips are excluded from Fund coverage
Correct answer: No, the Fund only reimburses the original deposit paid to the registrant, not rebooking premiums
The Travel Compensation Fund reimburses the consumer's actual loss paid to the failed registrant, not the higher cost of rebooking through another source.
TICO Travel Compensation Fund 5
Which type of travel purchase is specifically EXCLUDED from Travel Compensation Fund coverage?