Insurance: Holiday cover is a slippery slope

The Government banned lock-in insurance deals by travel agents, but pressure to buy costly policies remains, warns Clare Francis

Boxing Day is the perfect day for thinking about next year's summer break. About 14 per cent of summer holidays will be sold next month alone. The advice from consumer experts is to watch out for pressure selling from travel agents eager to flog travel insurance.

We are quite happy to look around for good holiday deals but when it comes to the insurance, research shows that taking out cover via a travel agent or tour operator can mean paying up to 60 per cent extra. For example, insurance for a two-week holiday in Europe would cost you pounds 39.95 with Lunn Poly and pounds 13 with Primary Direct. As you would for home contents or life insurance, shop around: there are good, comprehensive policies available at a fraction of travel agents' prices. A travel agent's persistence is under- standable as their commission can be up to two-thirds of the premium. Taking out cover when booking a holiday is convenient, but some consumers are unaware it is not obligatory to buy insurance from the travel agent.

Legislation introduced by the Monopolies and Mergers (now the Competition) Commission in November last year banned agents from linking holiday discounts to insurance premiums.

Helen Dwyer, managing director of Primary Direct, says this does not appear to have had much effect: "Travel agents around Britain are getting away with murder and the law seems to have no teeth to stop them. They're still applying unnecessary pressure on holidaymakers not wanting to take out the agent's travel insurance."

Shopping around for the best deal can be made very difficult by the tactics used by agents intent on getting a sale. A study carried out by Direct Line has shown these include making insurance a condition of booking; refusing to confirm the booking until given details of your own cover; and inertia selling, where insurance is added to the invoice unless the customer specifically says he or she doesn't want it. Packages including insurance are becoming more common too. Basic insurance cover is bundled into the price like transfers and other add-ons. This isn't optional and there is no price cut if the customer doesn't want it: but it is unlikely to be adequate, making extra cover necessary.

Some tour operators have it in their contracts that you must take their insurance. Others will allow you to take out your own as long as they agree it is comparable to their own: bad news for the consumer. The Consumers' Association believes this practice is uncompetitive and stops growth in the insurance market. "People should be free to choose a policy that's right for them," says Kate Levine of Holiday Which?. "If people are coming across this and are unhappy, we advise them to complain to the Office of Fair Trading."

Jackie Gibson, an Abta (Association of British Travel Agents) spokesperson advocates shopping around, but emphasises the importance of sorting insurance cover out as soon as a holiday has been booked. "The key aspects are not only the cover it provides in the event of an incident while you are away, but also the protection it gives prior to departure. Cancellation cover is as essential as medical expenses and personal liability," says Ms Gibson.

For anyone travelling more than twice a year, an annual policy is well worth considering. The Research Department, an insurance products analyst, has compiled some best-buy tables for annual policies. Its best cover is BIBA, at pounds 49 per adult, and Boots at pounds 99. Journeywise and AMS Travel are the cheapest at pounds 34 and pounds 38.91 respectively, with Asda (pounds 57.95) and Leeds & Holbeck BS (pounds 59) best overall - all based on European cover, including winter sports.

As with all insurance policies, do check the small print and know exactly what you are covered for. This is particularly important for people with existing medical conditions such as asthma or heart complaints. It is vital the insurer knows about these when you take out the policy, otherwise, in the unfortunate event of having to make a claim, you may discover that you are not, in fact, covered. It may be necessary to pay a little extra to ensure that you are insured properly. But this is not always the case, so do check.

n Lunn Poly Direct, 0870-333 4400; Primary Direct, 0870-444 3435; Direct Line, 0181-680 2121; BIBA, via broker; Boots Travel, 0845-840 2020; Journeywise, 0870-845 5555; AMS Travel, 01764 679779; Asda, 0800-064 6688; Leeds & Holbeck BS, 0870-602 4816.