Tesco’s policy wording puts squeeze on insurance sales

Supermarket giant believes holidaymakers will switch away from buying agents’ products

Tesco’s policy wording puts squeeze on insurance sales

Report by JANE ARCHER

TRAVEL agents’ profits from sales of travel insurance are set to decrease further with new policy wording from the Tesco supermarket chain that allows customers to sue their travel supplier.

Travel insurance policies normally exclude cover for legal action against the industry, but the new wording on Tesco’s document is effective for all new policies sold.

It means policyholders who are unhappy with the quality of their hotel or experience travel delays can take legal action against their operator, agent or hotelier. They can then claim the cost under their policy if Tesco’s legal team believes there is a case to answer.

At the moment, holidaymakers with a complaint have to rely on ABTA to resolve their dispute or use their own money in order to pursue the case through the small claims court.

Tesco head of insurance Paul Baxter said this change makes a clear distinction between direct-sell policies and those sold through the trade.

“Agents and tour operators can’t sell policies that allow clients to sue them, so this will be another reason why consumers will switch from buying through travel agents,” he said.

And Tesco Personal Finance director Andy Dewhurst hit out at “unscrupulous tour operators” who are “ripping off holidaymakers by the thousand”.

He suggested that by taking this move, the supermarket chain would make holidays from hell a thing of the past.

ABTA head of legal services Riccardo Nardi said the claims were extreme and branded Tesco as being “off its trolley”.

“Rogue travel companies are dealt with by Trading Standards officers or ABTA,” he said. “This policy does not give Tesco the power to deal with them.

“People can already use the ABTA arbitration scheme or the small claims court. An insurer-based claim may even cause a delay in the result,” he added.

Money talks: the new policy will enable clients to sue agents and operators for unsatisfactory holidays