Insurers urged to remove terrorism exclusions in travel policies

Insurers are under pressure from the government to provide cover for travellers caught up in overseas terrorist attacks.

Foreign secretary Jack Straw said: "I acknowledge many insurance policies currently exclude terrorism.

"Discussions with our consular directorate suggest insurers are ready and willing to extend their cover - some are doing so - and I encourage them to do so."

Ministers are considering compensation for terror victims without insurance and special financial assistance in "grave and exceptional" cases.

But Straw said travellers should not rely on this as an alternative to insurance.

He said it must be a fundamental responsibility of ravellers to ensure they are covered for all potential risks.

The government last week published a guide to state support for British nationals travelling abroad.

Straw added: "The fundamental responsibility in respect of the risks of travelling abroad must be met by travellers themselves through an appreciation of the risks and with comprehensive travel insurance."

A spokesman for Norwich Union said: "Some insurers do and some don't cover terrorism, but we will pay for medical expenses and repatriation."

He added some consumers were confused following the criticism of the insurance industry by Trevor Lakin, who lost his son Jeremy following the terrorist attack at Sharm el-Sheikh.

"A travel policy is not about providing compensation or flying out families."

Last summer, Biba slammed travel insurers that excluded terrorism risks.

The risk is included in the Biba travel scheme, underwritten by Arch.

And in November last year, AIG Europe announced it would remove its terrorism exclusion, which now applies to brokers selling its cover.

These include one of the UK's largest intermediaries, Insure & Go.

Managing director James Richardson said: "We put pressure on AIG to remove the exclusion and absorbed the cost, so that there has been no increase in our premiums."