Policy to help pursue holiday claims

The travel dispute cover will pay out up to 25,000 in legal costs for people suing tour operators, travel agents and hoteliers for breach of contract.

The policy is being offered by travel insurance specialist InsureandGo and could be bought as an add-on to its travel cover, at an extra cost of 4 for a single trip and 7 for an annual multi-trip policy.

The group said one in four people had suffered some form of breach of contract while on holiday, such as hotels that were not fully built, swimming pools with no water in them and rooms that were advertised as having sea views but actually looked on to a building site.

But despite these problems only 5 per cent of people had gone on to take legal action against the companies concerned. Among those who did take action, 95 per cent received compensation, with the average person getting more than 1,500 in redress.

Perry Wilson, founder of InsureandGo, said: "Holidaymakers are potentially losing out on a lot of money by not pursuing their holiday complaints.

"At least 12 per cent of breaches of contract that occur are estimated to be worth more than 1,000, yet a lot of us either don't complain at all, or let ourselves be fobbed off by the offending company because we are scared of how much it will cost to pursue our complaint in the courts."

People claiming on the policy must pay an excess of 35 and they can only make one claim per trip.