Holiday companies adding unwanted insuranceAutomatic insurance option could cost millions

24 April 2012

Additional travel costs

Be wary of holiday companies automatically charging you for travel insurance that you might not need

Which? research has found that some holiday companies automatically opt you in to their insurance policies online, potentially costing consumers millions of pounds.

Many companies, including, Saga, Lowcost Holidays and Hoseasons, opted you into their own insurance policy when booking a holiday online. While this may be useful for some, it could mean forking out for cover that you don't need. 

Which? Travel looked into insurance opt-ins for 188 holiday companies and found a number of instances where you could end up buying insurance unknowingly.

Travel insurance Saga

The investigation found that Saga added insurance worth £19 per person on a seven-night trip to Spain and £43 per person for a nine-night holiday to Mauritius.

Under Civil Aviation Authority rules, Saga's parent company is licensed to carry 145,000 passengers. If they all failed to opt-out of the cheapest insurance, Saga would collect £2.7 million.

Automatic opt-ins are to be outlawed under the European Consumer Rights Directive in 2014 but until then you should watch out for pre-ticked boxes when making online bookings.

Which? surcharges campaign

Which? recently successfully campaigned for a ban on excessive debit and credit card surcharges after lodging a super complaint to the Office of Fair Trading in March 2011.

Which? wants all unavoidable fees to be included in the headline price, and has called on firms to state any additional fees upfront so that consumers can better compare best prices, therefore improving competition.

We also asked for the cost of the surcharge to be no more than the cost to the retailer. The ban will be implemented once Article 19 of the Consumer Rights Directive comes into effect at the end of 2012.

More on this…

• Which? surcharges campaign - how we stopped 'rip-off' charges
Call the Which? Money Helpline - if you have a personal finance query
• Get the best travel insurance – with our handy guide