Holidaymakers are being urged to check their travel insurance policies carefully after a House of Lords report raised concerns about rejected claims. The Financial Services Regulation Committee found that too many people are buying travel insurance based on price alone, only to discover what their policy does not cover when something goes wrong.
Claims data reveals gap
According to data from the Financial Conduct Authority (FCA), between 83% and 86% of travel insurance claims were accepted in 2025. That compares with 99% for motor insurance claims.
The committee said there was a lack of understanding among customers about what they were paying for, despite rules designed to protect them. It warned that price comparison websites, while useful for finding cheaper deals, can encourage people to focus on the cost rather than the level of protection they are getting.
Concerns over AI research
The report also raised concerns about the lack of clear information available to help customers compare insurers, particularly when it comes to how often claims are accepted.
Baroness Noakes, chair of the committee, said: "Comparison websites have made it easier for people to find cheaper insurance, but the lack of good data on other aspects of product value means that many home and travel policies are chosen on price alone."
She added: "The industry and the FCA need to speed up and improve their efforts to help people better understand home and travel insurance, especially what their policies do and do not cover."
Recommendations and impact
The committee also highlighted concerns about the growing number of people using artificial intelligence to research insurance policies. It warned that AI-generated information could be misleading or incorrect, potentially leaving customers with the wrong understanding of their cover.
It recommended making information about claims outcomes easier for customers to compare. For holidaymakers preparing to travel abroad, the findings are a reminder to check policy details carefully before buying.
