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
Start your day with The Independent, sign up for daily news emails
News
The guide, since withdrawn, used illustrations and text to help people understand the court process (Getty)
newsMinistry of Justice gets law 'terribly wrong' in its guide to courts
News
Bobbi Kristina Brown with her mother Whitney Houston in 2011
people
News
Starting the day with a three-egg omelette could make people more charitable, according to new research
scienceFeed someone a big omelette, and they may give twice as much, thanks to a compound in the eggs
News
Top Gun actor Val Kilmer lost his small claims court battle in Van Nuys with the landlord of his Malibu mansion to get back his deposit after wallpapering over the kitchen cabinets
people
PROMOTED VIDEO
News
The actress Geraldine McEwan was perhaps best known for playing Agatha Christie's detective, Miss Marple (Rex)
peopleShe won a Bafta in 1991 for her role in Oranges Are Not The Only Fruit
News
newsPatrick Cockburn was able to update his agenda-setting 'The Rise of Islamic State' while under attack in Baghdad
News
Robert Fraser, aka Groovy Bob
peopleA new show honours Robert Fraser, one of the era's forgotten players
Life and Style
Torsten Sherwood's Noook is a simple construction toy for creating mini-architecture
tech
Sport
David Silva celebrates with Sergio Aguero after equalising against Chelsea
footballChelsea 1 Manchester City 1
News
i100
ebooks
ebooksA special investigation by Andy McSmith
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

Recruitment Genius: Software Development Manager

£40000 - £50000 per annum: Recruitment Genius: This is an exciting opportunity...

Ashdown Group: Product Manager - (Product Marketing, Financial Services)

£30000 - £35000 per annum + Benefits: Ashdown Group: Marketing Manager - Marke...

Recruitment Genius: Compliance Assistant

£13000 per annum: Recruitment Genius: This Pension Specialist was established ...

Ashdown Group: Market Research Executive

£23000 - £26000 per annum + Benefits: Ashdown Group: Market Research Executive...

Day In a Page

As in 1942, Germany must show restraint over Greece

As in 1942, Germany must show restraint over Greece

Mussolini tried to warn his ally of the danger of bringing the country to its knees. So should we, says Patrick Cockburn
Britain's widening poverty gap should be causing outrage at the start of the election campaign

The short stroll that should be our walk of shame

Courting the global elite has failed to benefit Britain, as the vast disparity in wealth on display in the capital shows
Homeless Veterans appeal: The rise of the working poor: when having a job cannot prevent poverty

Homeless Veterans appeal

The rise of the working poor: when having a job cannot prevent poverty
Prince Charles the saviour of the nation? A new book highlights concerns about how political he will be when he eventually becomes king

Prince Charles the saviour of the nation?

A new book highlights concerns about how political he will be when he eventually becomes king
How books can defeat Isis: Patrick Cockburn was able to update his agenda-setting 'The Rise of Islamic State' while under attack in Baghdad

How books can defeat Isis

Patrick Cockburn was able to update his agenda-setting 'The Rise of Islamic State' while under attack in Baghdad
Judith Hackitt: The myths of elf 'n' safety

Judith Hackitt: The myths of elf 'n' safety

She may be in charge of minimising our risks of injury, but the chair of the Health and Safety Executive still wants children to be able to hurt themselves
The open loathing between Barack Obama and Benjamin Netanyahu just got worse

The open loathing between Obama and Netanyahu just got worse

The Israeli PM's relationship with the Obama has always been chilly, but going over the President's head on Iran will do him no favours, says Rupert Cornwell
French chefs get 'le huff' as nation slips down global cuisine rankings

French chefs get 'le huff' as nation slips down global cuisine rankings

Fury at British best restaurants survey sees French magazine produce a rival list
Star choreographer Matthew Bourne gives young carers a chance to perform at Sadler's Wells

Young carers to make dance debut

What happened when superstar choreographer Matthew Bourne encouraged 27 teenage carers to think about themselves for once?
Design Council's 70th anniversary: Four of the most intriguing prototypes from Ones to Watch

Design Council's 70th anniversary

Four of the most intriguing prototypes from Ones to Watch
Dame Harriet Walter: The actress on learning what it is to age, plastic surgery, and her unease at being honoured by the establishment

Dame Harriet Walter interview

The actress on learning what it is to age, plastic surgery, and her unease at being honoured by the establishment
Art should not be a slave to the ideas driving it

Art should not be a slave to the ideas driving it

Critics of Tom Stoppard's new play seem to agree that cerebral can never trump character, says DJ Taylor
Bill Granger recipes: Our chef's winter salads will make you feel energised through February

Bill Granger's winter salads

Salads aren't just a bit on the side, says our chef - their crunch, colour and natural goodness are perfect for a midwinter pick-me-up
England vs Wales: Cool head George Ford ready to put out dragon fire

George Ford: Cool head ready to put out dragon fire

No 10’s calmness under pressure will be key for England in Cardiff
Michael Calvin: Time for Old Firm to put aside bigotry and forge new links

Michael Calvin's Last Word

Time for Old Firm to put aside bigotry and forge new links