Personal Finance: Holidaymakers are paying millions in excessive travel insurance premiums

WHAT WOULD you think of an electrical goods store which tried to tell you that the fridge you want may not be available unless you buy a warranty to go with it? Or that it wants to check any household policy you have to see whether the fridge is protected under its terms.

The warranty, by the way, covers parts but not labour, and it costs at least twice the price of any comparable warranty sold elsewhere. The reason is that the store doesn't want you to walk out of the shop without knowing that if anything were to happen to your fridge it could be fixed immediately.

Somehow, I suspect that were you treated in such a manner you would refuse to set foot in that electrical goods store ever again. Strange then, that up to 10 million holidaymakers are likely to come under pressure from tour operators to buy their travel insurance in preference to perfectly adequate (and much cheaper) cover available from a proper insurance company.

Things used to be even worse, by the way. Up until November last year, a travel operator could actually refuse to sell you the holiday. That changed after the Government acted to stop so-called conditional selling of cheap holidays.

Despite the introduction of Government rules preventing this, a survey by Direct Line insurance reveals that, of those who booked both a holiday and insurance with an agent since November, 40 per cent were "coerced".

All the operators make insurance a condition of booking. Most of them insist on being given details of the other cover. The alternative policy must be "at least as good" as theirs.

Repatriation and medical cover are cited as key reasons for insurance. Yet almost six out of 10 people who took out cover through the travel company were not asked about any medical conditions which could negate their insurance.

Eight out of 10 people were not asked if they were planning adventurous activities which, again, might negate their cover. More than 20 per cent were simply handed the written policy without any explanation.

If a travel operator's policy was so fantastic, then you might say: so what?

If anything, the reverse is true. Take a 14-day holiday to Europe for two people. The prices charged by Direct Line is pounds 40-odd. Actually, that's not necessarily the best available deal, but let that pass. But Thomas Cook stings you for pounds 79, Cosmos charges pounds 73.80, Thomson levies pounds 84, while Airtours takes an amazing pounds 86.

Clearly, despite an earlier investigation by the Monopolies and Mergers Commission, rules are being flouted by the travel industry. Holidaymakers are paying millions in excessive premiums. Time for the Government to act again.

LAST WEEK we published a story in which a Swinton Insurance policyholder found that the company refused to belong to any of the insurance industry's arbitration schemes. This week, I am pleased to say that following The Independent's intervention, the company has offered the person concerned pounds 1,000 in full settlement of his claim. The offer has been accepted.

Why is it necessary for The Indie to step in for someone to be offered compensation? Why won't Swinton belong to any arbitration schemes? And should anyone take out a policy through a company which openly challenges its policyholders to go to court if they are in dispute with it over their cover?

Suggested Topics
News
The surrealist comedian at the Q Awards in 2010
people
News
Russell Brand arriving for the book launch in East London
peopleRussell Brand cancels his book launch debate due to concerns about the make-up of the panel
Sport
Christiano Ronaldo enjoys his opening goal
champions leagueLiverpool 0 Real Madrid 3: Ronaldo and Benzema run Reds ragged to avenge thrashing from their last visit to Anfield
Arts and Entertainment
Sir Nicholas Serota has been a feature in the Power 100 top ten since its 2002 launch
art
PROMOTED VIDEO
Arts and Entertainment
Awesome foursome: Sam Smith shows off his awards
music22-year-old confirms he is 2014’s breakout British music success
Life and Style
Six of the 76 Goats' cheese samples contained a significant amount of sheep's cheese
food + drink
Arts and Entertainment
Contestants during this summer's Celebrity Big Brother grand finale
tvBroadcaster attempts to change its image following sale to American media group
Extras
indybest
Arts and Entertainment
Sarah Dales attempts to sell British Breeze in the luxury scent task
tvReview: 'Apprentice' candidate on the verge of tears as they were ejected from the boardroom
News
Call me Superman: one of many unusual names chosen by Chinese students
newsChinese state TV offers advice for citizens picking a Western moniker
News
ebooksAn unforgettable anthology of contemporary reportage
News
Wilko Johnson is currently on his farewell tour
people
Voices
New look: Zellweger at Elle's Women in Hollywood awards on Monday
voicesRenée Zellweger's real crime has been to age in an industry that prizes women's youth over humanity, says Amanda Hess
News
Let’s pretend: KidZania in Tokyo
educationKidZania lets children try their hands at being a firefighter, doctor or factory worker for the day
Life and Style
CHARGE BOOSTER: Aeroplane mode doesn't sound very exciting, but it can be a (phone) hacker's friend. Turning on the option while charging your mobile will increase the speed at which your phone battery charges
techNew book reveals how to rid your inbox of spam, protect your passwords and amplify your iPhone
Arts and Entertainment
Julianne Moore and Ellen Page are starring together in civil rights drama Freeheld
film
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

IT Systems Business Analyst - Watford - £28k + bonus + benefits

£24000 - £28000 per annum + bonus & benefits: Ashdown Group: IT Business Syste...

Trainee Recruitment Consultant - Birmingham - Real Staffing

£18000 - £23000 per annum + Commission: SThree: The SThree group is a world le...

Trainee Recruitment Consultant Birmingham

£18000 - £23000 per annum + Comission: SThree: The SThree group is a world lea...

Trainee Recruitment Consultants

£20000 - £25000 per annum + OTE £Competitive: SThree: SThree Group and have be...

Day In a Page

How could three tourists have been battered within an inch of their lives by a burglar in a plush London hotel?

A crime that reveals London's dark heart

How could three tourists have been battered within an inch of their lives by a burglar in a plush London hotel?
Meet 'Porridge' and 'Vampire': Chinese state TV is offering advice for citizens picking a Western moniker

Lost in translation: Western monikers

Chinese state TV is offering advice for citizens picking a Western moniker. Simon Usborne, who met a 'Porridge' and a 'Vampire' while in China, can see the problem
Handy hacks that make life easier: New book reveals how to rid your inbox of spam, protect your passwords and amplify your iPhone

Handy hacks that make life easier

New book reveals how to rid your email inbox of spam, protect your passwords and amplify your iPhone with a loo-roll
KidZania lets children try their hands at being a firefighter, doctor or factory worker for the day

KidZania: It's a small world

The new 'educational entertainment experience' in London's Shepherd's Bush will allow children to try out the jobs that are usually undertaken by adults, including firefighter, doctor or factory worker
Renée Zellweger's real crime has been to age in an industry that prizes women's youth over humanity

'Renée Zellweger's real crime was to age'

The actress's altered appearance raised eyebrows at Elle's Women in Hollywood awards on Monday
From Cinderella to The Jungle Book, Disney plans live-action remakes of animated classics

Disney plans live-action remakes of animated classics

From Cinderella to The Jungle Book, Patrick Grafton-Green wonders if they can ever recapture the old magic
Thousands of teenagers to visit battlefields of the First World War in new Government scheme

Pupils to visit First World War battlefields

A new Government scheme aims to bring the the horrors of the conflict to life over the next five years
The 10 best smartphone accessories

Make the most of your mobile: 10 best smartphone accessories

Try these add-ons for everything from secret charging to making sure you never lose your keys again
Mario Balotelli substituted at half-time against Real Madrid: Was this shirt swapping the real reason?

Liverpool v Real Madrid

Mario Balotelli substituted at half-time. Was shirt swapping the real reason?
West Indies tour of India: Hurricane set to sweep Windies into the shadows

Hurricane set to sweep Windies into the shadows

Decision to pull out of India tour leaves the WICB fighting for its existence with an off-field storm building
Indiana serial killer? Man arrested for murdering teenage prostitute confesses to six other murders - and police fear there could be many more

A new American serial killer?

Police fear man arrested for murder of teen prostitute could be responsible for killing spree dating back 20 years
Sweetie, the fake 10-year-old girl designed to catch online predators, claims her first scalp

Sting to trap paedophiles may not carry weight in UK courts

Computer image of ‘Sweetie’ represented entrapment, experts say
Fukushima nuclear crisis: Evacuees still stuck in cramped emergency housing three years on - and may never return home

Return to Fukushima – a land they will never call home again

Evacuees still stuck in cramped emergency housing three years on from nuclear disaster
Wildlife Photographer of the Year: Intimate image of resting lions claims top prize

Wildlife Photographer of the Year

Intimate image of resting lions claims top prize
Online petitions: Sign here to change the world

Want to change the world? Just sign here

The proliferation of online petitions allows us to register our protests at the touch of a button. But do they change anything?