As the unemployment rate continues to climb, Central Holidays has updated its travel insurance policy to allow for cancellation should travelers experience a loss of employment after booking their travels.

"In these difficult economic times, travelers can be hesitant about booking vacation plans for fear of a potential economic setback or job loss," the Moonachie, N.J.-based operator said in a release. "Central Holidays has proactively included this new feature to alleviate this anxiety."

The company's insurance policy eliminates any cancellation penalties for a reservation should the traveler become unemployed prior to his/her departure date.

Central Holiday's updated travel insurance plan is valid on new bookings with insurance premiums collected on or after May 1 and is available as an additional feature at no extra cost to current plan rates. To qualify, the traveler must have been employed for a minimum of one year on a full-time basis at the time of booking. Redemption requires proof of loss of employment. Some restrictions may apply, according to the tour operator.

"The enhanced coverage is another way our travel agent partners can help make their travelers more confident booking the trip of their dreams right now, when the deals are hot, even if their employment situation is uncertain," Fred Berardo, president and CEO of Central Holidays, said in a statement.

The 37-year old Central Holidays sells Italy, Spain, Portugal, France, Greece, Turkey, the Mediterranean, European river cruises and ski programs.