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Last Updated: Sunday, 25 February 2007, 06:01 GMT
MPs demand travel cover overhaul
Some holidaymakers are unaware they could be exposed to losses
Tougher rules over travel insurance are needed to protect holidaymakers unaware that their policies may not cover all their costs, an MPs' report has said.

Ten million people travelling last year would not have been covered for medical costs caused by a terrorist attack, a Treasury Select Committee report said.

The report criticised exclusion clauses "buried" in small print, and the way policies are sold by travel agents.

The insurance industry said more regulation would force prices up.

It also said there were very few complaints about travel insurance policies.

Small print

Last year about 20 million people bought travel insurance policies, worth around 670m.

Policies bought at the same time as a holiday - so-called bundled insurance policies - often throw up more problems than those bought separately, because people do not scrutinise them so carefully, the report found.

The committee noted research from consumer watchdog Which?, suggesting only one in five travel agents explained policies to customers.

All the information written on insurance policies should be more user-friendly
Gordon Hall, Barnstaple

The same research claimed almost two-thirds did not ask about medical history, even though many policies have restrictions for people with pre-existing conditions.

The committee is therefore calling for regulation to be broadened to cover travel agents.

John McFall MP, chair of the Treasury Committee, said: "All too often, exclusions are buried in the small print of insurance policies.

"Holidaymakers are risking damage to their health or considerable financial loss if they require treatment while abroad or repatriation to the UK."

Policy announcement

However, Nick Starling, director of general insurance at the Association of British Insurers, said the risk of consumers getting a bad deal was low.

He pointed out that the Financial Ombudsman received only 1,700 complaints last year.

A Treasury spokesman said: "Last year the Economic Secretary launched a review of travel insurance, including a consultation which closed this week.

"We will study the results of this consultation and the Treasury Select Committee report and announce our policy intentions in the coming months."

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