Research by Sainsbury’s Travel Insurance has previously found that almost 400,000 UK customers have been “misled” by their travel agents when purchasing an insurance policy.

As a result, the Financial Services Authority (FSA) launched new legislation to ensure that customers were protected from travel agents misguiding them into purchasing travel insurance deals that had been advertising a specific firm.

Manager, Sam Marrs of Sainsbury’s Travel Insurance welcomed the new legislations.

He said: "Our research shows that up to as many as 8.1 million people could have bought insurance from travel agents over the past 12 months and the new regulation will provide consumers with valuable much needed protection."

What is the FSA’s policy?

The FSA’s new legislations came into effect on January 1st this year to ensure that holidaymakers were protected by being offered the best insurance deal available by travel agents.

Before January 1st, the sale of travel insurance was under the supervision of the Association of British Travel Insurers (ABTA).

It is now regulated by the FSA.

However, recent research conducted by World First Travel Insurance found that a significant number of travel firms have ignored the FSA’s legislations.

Holidaymakers still misled on travel insurance

Despite the regulations, a number of holidaymakers are still being left with poor insurance deals as travel agents continue to mislead Brits.

According to new research conducted by World First Travel Insurance, a number of travel firms who provide the insurance are still failing to meet the FSA’s regulations.

The firm found that 25 per cent of travel firms are selling the insurance illegally by misleading customers to purchase more expensive insurance policies instead of offering the cheaper deals.

Martin Rothwell, of World First Travel Insurance, said: “It has been three months since the new regulations came into place, and still over a quarter of businesses are falling foul of them.”

The study found that unregulated travel firms had failed to follow the legislations by continuing to advertise specific insurers- something which under the new regulations they are not permitted to do.

In 2007, Vernon Everitt, FSA Retail Themes Director, said: "Most people rely on some form of insurance to protect them and advertising is a major influence on what they choose to buy. So it must be clear, fair and not misleading, leaving people with a balanced picture of what's on offer.”

According to the FSA, travel insurance deals recommended by travel agents could end up being more expensive for holidaymakers compared to insurance policies sought independently by the travellers.

As a result, insurers and experts are advising holidaymakers to ensure they compare the market to find the best deals rather than heavily rely on the travel agent.

Rothwell warned that travel agents may face serious consequences if they continue to ignore the FSA regulations.

He said: “They need to realise that if they don't make the changes they are in contravention of FSA rules and this could have real consequences.

Agents and domestic operators must review the content of their websites urgently and take remedial action to amend their travel insurance wordings, including wording on their booking forms.'”