Unless the government regulates the way travel insurance is sold, holidaymakers could find themselves seriously out of pocket if they need to make a claim.
In a report commissioned by Direct Line Travel Insurance, it found 8.5m holidaymakers could fall prey to travel agents and tour operators who disregard the welfare of their customers when selling travel insurance with a holiday.
The report, `The Tourist Trap', suggests that holidaymakers are being sold inappropriate cover. Direct Line is now calling for a new regulatory approach that deals with insurance sold by travel agents and tour operators and puts an end to the range of anti-consumer practices currently costing consumers millions of pounds each year.
The Research Department (TRD), the financial services analyst, is publishing a report next week called `Travel Insurance in the UK', which echoes these concerns and further suggests that travel agents are charging up to 80% more for their travel insurance than policies bought direct through brokers or on the internet.
Business manager at Direct Line Travel Insurance Tony Chilcott said: "Insurance sold with a holiday has been allowed to flourish because of a lack of regulation or stringent monitoring. Unless tough action is taken by the government to outlaw these anti-competitive practices, thousands of holidaymakers will continue to pay the price."
