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Treasury review of travel insurance stirs it up

The Treasury review into travel insurance has begun, and feathers are already flying. The Treasury suspects that many policies sold via travel agents are being mis-sold and leaving consumers exposed.

The travel trade reaction is to suggest that regulating them will make many more people travel without any insurance - with absolutely no evidence to support such a claim.

The Treasury Select Committee began with MPs hearing a host of true stories of people who believed they had cover, only to find, when disaster struck, that they were badly misinformed. Most policies automatically exclude claims from women who are between eight and 28 weeks pregnant. But travel agents rarely point this out, so some may buy cover with their holiday months before travelling and not realise that if they are or subsequently become pregnant, virtually all protection will be removed.

Many policies excluded claims from children under 15 who are permanently injured. This left a child who suffered serious head injuries on a waterpark slide in Turkey unable to claim any compensation for his injuries.

As an example of the potentially misleading practices employed by some travel agents, the government has observed that there are often exclusions made for terrorism risks. The Association of British Insurers claims that 50 per cent of all travel insurance policies fail to cover expenses caused by terrorist incidents.

Treasury Committee chairman John McFall says: "There is no doubt that there is cause for concern that consumers are not adequately protected, nor are they receiving the information they need to make wise choices."

Related links

Travel Health insurance : News update: November 2006