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Personal Finance: Ignore the travel firms - book your own cover

FROM tomorrow, tour operators and travel agents will be banned from selling compulsory travel insurance when you book a holiday. You know the sort of thing: you go into the agent or call up the operator and they offer you a great last-minute bargain, on the condition you take their expensive own-brand insurance.

Two weeks in Europe for parents and a young child would cost almost pounds 110 to insure with Lunn Poly and Going Places. You'd pay less than half that with a decent independent policy and there are bargains around the pounds 30 mark.

Outlawing compulsory insurance is a step in the right direction but it isn't enough, and the travel giants will still give us the hard sell. Put yourself in their place: margins are so low on package holidays that insurance sales are vital.

So the big tour operators either ask for confirmation of any alternative insurance arrangements at the time of booking, or say the booking will be refused if you don't provide the details of your policy eight weeks before departure. The idea is that you won't have bothered to buy cover before you booked the holiday, so your inertia gives the agent or operator the chance to force a sale.

And if you do have your own insurance, you may find the operator will "vet" your policy to make sure its cover is as good or better than the overpriced alternative on offer from the operator. Anecdotal evidence from insurers suggests that many customers with independently bought travel cover have already been told they have unworthy policies. Usually the travel agent focuses on the amount of medical insurance, typically pounds 5m. Some travel operators offer pounds 10m and so claim your policy is not comparable. But, as one independent insurer pointed out to me this week, a claim of more than pounds 1m is unheard of. The pounds 10m limit is window-dressing. Imagine having your documents looked at by the very person who has just failed to flog you an insurance deal (and who is upset because he or she has just lost a commission payment). What gives them the right to dictate terms? If you have this sort of problem, complain to your insurer and the travel operator.

If you travel abroad two or three times a year, buy yourself an annual travel insurance policy. A single policy is around pounds 70 and a couple would pay around pounds 100 for a competitive deal. These schemes are sold by an increasing number of insurers (look for ads in the papers) as well as the Post Office, banks and building societies.