Caravan Insurance

Thousands of UK holidaymakers are including baggage cover in their travel insurance packages - without realising that their luggage is covered by their cheap home insurance policy.

A study by Times Travel found that the responsibility for these unnecessary payments lies at the door of insurance brokers, who are failing to adequately check whether their customers are already covered by low cost home insurance cover.

Of the survey's respondents, a majority of travel insurance brokers admitted that they did not "assess what cover a customer has", in the words of the enforcing body, the Financial Services Authority (FSA).

"If an adviser thinks a person may already be covered, then they should ask the question," the FSA commented.

"It would be good if companies were more upfront, but it seems it is down to customers to be aware of what protection they already have," Derek Ketteridge, chairman of insurance broker Ketteridge, told the Times.

An average traveller wastes around £16 on unnecessary expenditure, the Times Travel survey estimates, basing its calculations on average insurance costs of £80 - of which between 15 and 20 per cent is spent on baggage cover.

Despite assurances by the FSA that insurance brokers are responsible for making sure their customers are not overpaying, a recent survey by market research firm Defaqto found that total overpayments reached around £175 million each year.