Travelodge has moved into the insurance market by offering travel insurance to its customers.

The budget hotel chain is offering a range of cover, including single trip and annual policies, on its website.

It is believed other insurance products, including breakdown cover, could follow.

HSBC Insurance Brokers is acting as Travelodge's broker, with the policies being underwritten by AIG. Travelodge claims its rates are significantly lower than most of its competitors.

The company expressed confidence that its new venture will prove a success, with the bulk of travel insurance and 83% of Travelodge's reservations being booked online.

"Travel insurance is a natural fit with our business," said chief executive Grant Hearn. "Our two million monthly website users can now purchase an insurance product with a brand they know and trust."