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Beware of 'free' travel-cover offers

Customers with current accounts that charge a monthly fee have been warned to look carefully at any free travel insurance that may come with it.

Research from financial information firm Defaqto found that many of the "free" travel insurance that come as part of a monthly fee-charging current account package have many exclusions which make them virtually worthless. The cover on offer is usually limited, leaving the consumer having to top up their travel insurance with a separate policy.

For instance, 13 per cent of policies cover only the account holder and their spouse excluding other family members and unmarried partners.

"There are often wide variations in coverage offered by particular types of benefits, so it is essential that consumers check that what is offered is appropriate," said David Black from Defaqto. "For example, does the travel insurance policy cover just Europe or does it provide worldwide cover?"

Typically, "packaged" current accounts charge between £8 and £17 per month in return for preferential customer service and extras such as card protection against fraud, discounts on products and travel insurance.