Travel insurance exclusions criticised by MPs

British holidaymakers' insurance could be vulnerable to terrorism

Sunday, 25, Feb 2007 12:00

Millions of holidaying Britons could have been left stranded by hidden clauses in their travel insurance if a terrorist event occurred in 2006, according to a new report from MPs.

The Treasury select committee states that there is "insufficient awareness" about hidden holiday insurance clauses that could exclude cover against terrorist attacks, while some pre-existing medical conditions - including pregnancy - might also not be covered.

Intermediaries such as travel agents were singled out by the commission for particular criticism, as their sales processes are likely to have "accentuated" the problems with the way holiday insurance is promoted.

John McFall, chair of the Treasury committee, remarked: "All too often, exclusions are buried in the small print of insurance policies."

"Holidaymakers are risking damage to their health or considerable financial loss if they require treatment while abroad or repatriation to the UK," he added.

Consumer interest group Which? called the committee's report "damning" and said there is an urgent need for "consistent regulation of travel insurance", whether sold through travel agents or elsewhere.

Mike Naylor, principal researcher at Which?, said there is no reason why travel agents should be excluded from regulation and concluded: "People should have the same protection and peace of mind on holiday regardless of where they buy their insurance."

In light of its findings, the Treasury select commission suggests that the scope of the Financial Services Authority should be widened to include regulation of the bundled travel insurance market.