New faces join travel insurance market: Paul Gosling finds increasing competition among people offering cover for motoring holidays in Europe

----------------------------------------------------------------- Comparative insurance costs in pounds ----------------------------------------------------------------- 15 DAYS 15 DAYS ANNUAL Vehicle With 2 Vehicle only adults only Europ Assistance 41.50 89.80 84.00 Premier Service AA Five Star 41.50 72.00 98.95 Standard Service AA Five Star 54.00 84.50 111.50* Vehicle Plus RAC** 52.95** 52.95** 105.00** National Breakdown 40.00 73.00 59.90 Standard membership Direct Line 38.00 56.00 n/a ----------------------------------------------------------------- *AA Europe Service **Up to eight passengers Includes Continental breakdown service In association with Europ Assistance, available only to policyholders -----------------------------------------------------------------

THE MARKET for European-wide breakdown services is suddenly more competitive, with insurers keen to exploit the increase in Continental motoring expected when the Channel tunnel opens.

Several motor insurers have entered into arrangements with breakdown services to offer policy holders cheaper alternatives to cover offered by the AA and RAC.

Churchill, a subsidiary of the large Winterthur group, has entered into an arrangement with Gesa Assistance, a breakdown service with about 4,600 garages across Europe.

A Churchill Abroad policy provides a full breakdown and rescue service, medical expenses cover up to pounds 100,000, legal expenses in case of criminal prosecution following a road accident and the costs of car hire and additional accommodation arising from a vehicle breakdown or health problem. This is an add-on policy available only to existing customers.

Direct Line is offering a similar service, also available only to policyholders, by arrangement with Europ Assistance, which claims to be the largest breakdown service in Europe, with 15,000 garages in its network.

Direct Line offers vehicle cover with an option for driver and passengers to be protected against medical expenses or lost property and providing compensation for cancellation or delay.

Europ Assistance also offers its own free-standing policy, which provides breakdown and recovery cover, including the costs of accommodation, car hire and other travel costs arising from a breakdown. Travel, medical and personal accident cover are also included for driver and passengers.

With its Family Continental Motoring policy there is no additional cost for two children to accompany two adults, unlike its Premier Service policy or the AA Standard Vehicle and Vehicle Plus policies.

Prudential customers are offered a tie-up with British-based National Breakdown to offer a breakdown and recovery service supported by a network of 6,000 garages across Europe.

As well as providing cover for the expenses incurred by delays caused by breakdown or accident, the cover includes legal expenses up to pounds 10,000 arising from a motoring prosecution and an advance of up to pounds 4,000 for bail or security if a driver is detained in custody.

National Breakdown's standard service includes breakdown recovery across Europe.

Eagle Star has withdrawn its breakdown and medical cover option, saying that the number of claims was too small to justify continuation.

The AA and RAC offer far more than just breakdown services. The RAC gives several options of travel insurance including medical benefits, luggage and compensation for cancellation.

Peter Horn, manager of the AA's Five Star service, says: 'It is becoming a more and more competitive market. It is very obvious that personal travel insurance is getting squeezed and more companies are coming into the Continental breakdown market. It is the flavour of the month.

'We are the number one and I don't believe they can challenge us on service, so they have to challenge us on the basis of price and commission. But there is more to it than just price. We have 15,000 garages plus 12,000 patrols, which the others can't match.'

Other breakdown services, relying on links with local garages, dispute that patrols add to the service and argue that they can instead cause motorists to suffer a longer wait.

The AA advises that motorists should not only seek comparative quotes but also read the small print. While some policies, for example, are suitable for people who own a second home in France and visit it regularly, others limit the number of days abroad. Policies may also exclude older cars, place an upper limit on the amount of compensation payable and limit the payment for repatriation to the value of the car.

'It is very easy for companies to build in restrictions which work against the customer,' Mr Horn says.

(Photograph omitted)