Caravan Insurance

Her Majesty's Treasury is to launch an investigation into the standard of travel insurance sold to caravanners by travel agents as part of a wider holiday package.

Travel insurance is essential to cover holidaymakers for medical expenses, loss, theft and cancellations, but while stand-alone policies are currently governed by the same rules as other forms of insurance, those bought as part of a broader deal are not.

The Treasury has now decided to intervene in the matter by looking at the situation from the consumer's point of view and deciding whether any changes are necessary to the existing framework of regulation for this form of travel policy.

Treasury minister Ed Balls explained: "Our investigation will ask whether it's fair to put all the pressure on ordinary families to read the small print and ask the right questions to make sure they are properly covered.

"It will ask whether the travel industry should be doing more to ensure families are not left high and dry on their holidays and whether we need to strengthen regulation to protect them."

The move was commended by the Association of British Insurers, with deputy director general Steven Skarloff saying that it "makes sense" for the government to review this sector of the insurance market to ensure consumers get the protection they need.

Equally welcoming was the British Insurance Brokers Association, which is highly critical of the expensiveness and inconsistency of many policies sold by travel agents and which called on consumers to shop around before buying cover.

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