Travel insurance may not cover all you think

Consumer magazine Which? Holiday said only half of insurers would pay compensation if the holder were to miss their flight due to bad traffic, although the majority would pay out if people were delayed by public transport.

Some insurers said they would cover people if their car was directly involved in an accident which led to them missing their flight.

But 96 per cent of policies would pay out if a flight was missed due to a vehicle breaking down, although not all causes of a breakdown were covered, with flat batteries and punctures often excluded, while people may also have to provide evidence their car was well maintained and regularly serviced.

Around 41 per cent of the 80 insurers looked at covered holidaymakers against a scheduled airline failing, while 14 per cent would provide cover for an additional premium.

However, only 35 per cent would pay out compensation to people if they had arranged the separate elements of a holiday themselves, and a hotel, car hire firm or foreign tour operator went bust. An airline strike was covered by 91 per cent of policies however, only 18 per cent would pay out if a holiday was spoilt due to an act of terrorism, although 70 per cent of insurers said they would still cover emergency medical treatment under these circumstances.

Rochelle Turner, head of research at Which? Holiday,

said: "Holidaymakers tend to assume that if they've taken out travel insurance, they'll be covered for disasters beyond their control – an airline or hotel chain going bust, or getting caught up in an act of terrorism.

"Sadly, our rigorous research has found that's not always the case.

"The travel insurance industry must up its game and start to provide policies customers can really rely on, or at least make their policies clear rather than hiding exclusions in the small print."