Warning on holiday insurance

HOLIDAYMAKERS have been warned by a consumer watchdog about a new travel insurance scam.

The Office of Fair Trading said some travel agents were telling holidaymakers that new package travel regulations that came into force at the end of last year obliged customers to take out travel insurance.

Sir Bryan Carsberg, the OFT's director-general, said: 'Although the regulations state that holiday package organisers should provide information on any optional travel insurance available to their customers, the regulations do not oblige customers to accept.

'It is a wise precaution to take out travel insurance when buying a holiday. But insurance can represent a significant proportion of the price of a holiday, so customers should shop around.'

Holidaymakers should compare the cost of insurance from a travel agent with cover offered by banks, building societies or insurance brokers, Sir Bryan said.

Most tour operators made it a condition of their contracts that holidaymakers should arrange adequate cover. 'This is quite legal. But it is a matter of company policy, rather than a legal requirement,' he added.