Travel insurance that is hidden away

INSURANCE SHOULD be clear and unambiguous. It should protect and when a legitimate claim is made, reimburse the purchaser. It should not rebate as vouchers in place of cash or surreptitiously gain extra business by not being transparent.

Step forward the online insurer Lastminute.com, owned by Bravofly Rumbo, based in Switzerland where it has a public stock market quotation.

The company’s main business is to act as a broker between travellers and airlines. It handles over 5m holidays a year of which some 1.2m are bought in the UK. It also sells travel cover under the Full Flex brand name, aimed at protecting if a journey plan has to be changed.

It gives two alternatives when closing a transaction: to ‘accept and pay’ or ‘continue without charge’. Many applicants affirm the former as they think this is to confirm the booking for a flight. They do not realise that clicking onto that box means they have also bought insurance.

This is not transparent. No request for any such cover has been made as part of the booking.

When a claim is made, the customer would expect to receive the cost of the cancelled tickets in the same currency they used to make the purchase. Instead this is denied and the insurer issues vouchers. This is not the industry practice.

A home insurer would not be expected to forward vouchers if a claim was established for theft of contents or a motor one for a car written off.

It is time both activities were outlawed: no trick of hand on an application process and no unwanted vouchers in place of proper reimbursement. If the company will not comply, airlines should exert pressure as bookings cannot be effected without their agreement.

Clearly, a required and successful market has been found but the firm should immediately become consumerfriendly and not take advantage of its key position in the travel trade.