Beach insurers told to pay

Holiday-makers who fall asleep on the beach this summer and wake to find belongings gone are likely to be entitled to a payout under a travel insurance policy. But, warns the Insurance Ombudsman - who arbitrates on disputed insurance claims - people who go swimming and return to find belongings missing are likely to have less of a case for compensation.

The ombudsman last week expressed concern that insurers continue to reject too many claims for thefts and losses using the "get out" clause that a policyholder had not shown "reasonable care". A spokesman said: "Insurers have to accept that people are in unfamiliar surroundings; they are more relaxed and perhaps less inhibited after a drink or two. They should not adopt an over-rigid approach to the application of policy conditions. The test is what a reasonable person would expect."

The warnings will cheer holiday-makers faced with insurers who might seem to use any excuse to avoid paying up, and are important because the ombudsman has the power to overrule the companies. It costs consumers nothing to take a claim to him, but they must first reach deadlock with the insurer.

The ombudsman's spokesman added that with thefts and losses it was up to the insurer to prove that a holiday-maker had actually been reckless - that they had "courted a known risk". It might not seem unreasonable to doze off on a hot beach or next to a swimming pool on holiday, although actively leaving belongings to go swimming might seem more "careless". However the ombudsman says his view would also depend on the value of the belongings - reasonable people might regard anyone who fell asleep with a pounds 5,000 Rolex watch next to them as reckless.

The ombudsman also warns insurers to be reasonable in their demands for receipts or other proofs of ownership when dealing with theft claims. "To expect people to keep receipts going back years is unreasonable," says the spokesman.

One other tip is that even if a claim for the costs of cancelling a holiday does not stand, the policyholder will usually be entitled to at least a part rebate of the premium on the policy. Cancellation of the holiday cancels much of the risk the insurer would otherwise bear.

Consumers battling with insurers should also bear in mind that taking a case to the ombudsman costs the insurer a "case fee" of around pounds 500 - regardless of who wins. Threats to go the ombudsman may well pressure insurers to pay up on small claims to avoid this fee.

Despite high claims levels, too many people fail to shop around sufficiently and simply opt for any policy pushed at them by a holiday or travel company. While it can often be a condition of a particular holiday deal that you take out a certain policy, there are suggestions that companies are increasingly open to negotiation if you do want to arrange your own insurance. The March edition of Holiday Which?, which will be available at many public libraries, detailed "best-buy" travel insurance policies. For people who go away twice or more in a year an annual policy might be worth considering. Bradford & Bingley, the building society, earlier this year launched a price-beating pounds 70 a year policy that is among the best value. This policy has no excess on claims - with most policies you are normally liable for the first pounds 30 or more of any claim.

The Insurance Ombudsman Bureau 0171-928 4488; Bradford & Bingley 0800 435642.

Visa has published its free '1997 Holiday Money Guide' which gives useful guidance on the acceptability of plastic cards and other holiday money tips for a range of popular tourist destinations. Call 0171 231 5432.