Everyone buying travel insurance in the UK will soon be protected by Government regulations.
Ed Balls, the economic secretary to the treasury announced this week that from 2009, the FSA will have responsibility for regulating all travel insurance.
Currently, the FSA regulates travel insurance bought from banks and building societies, but not travel insurance bought from a travel agent as part of a deal with the holiday.
This new regulation will allow anyone buying travel insurance – whether it is a yearly cover plan or single trip cover, the right to complain if the policy is mis-sold.
Mr Balls said: "Twenty million people are buying travel insurance each year, and some are putting themselves and their families at risk by buying travel insurance that may not cover their needs.
“This happens as consumers have a 'knowledge gap' when buying travel insurance, as they often do not understand what they are buying or what it covers.
"Evidence shows that companies regulated by the FSA are better at getting consumers to make an informed choice because they are better at explaining the key features and exclusions of the product and guiding the customer through the sales process.
"I have therefore decided to make all travel insurance policies sold in the UK to be done through FSA regulated companies. This will come into effect from January 2009, following a further period of consultation.
“Consumers in the future buying travel insurance sold alongside their holiday will get the same core regulatory protection and rights as consumers buying stand-alone travel insurance do now," he said.
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