LONDON (Reuters) - Tourists should beware of "free" travel insurance policies given away with financial products that may ultimately leave them without adequate cover on holiday, according to a consumer watchdog.

The Citizen's Advice Bureau is warning holidaymakers to be wary of credit cards or bank accounts that offer free travel insurance as a sweetener to win new business.

Susan Marks at the CAB said: "The policies given away 'free' with financial products tend to be basic products with only standard forms of cover.

"Those going outside the EU or needing specialist insurance cover are really advised to read the policy details and to establish whether the cover they have is entirely adequate."

Marks said such policies were never genuinely free anyway as they were conditional on taking out a credit card or bank account and the cost was factored in one way or another.

There was nothing wrong with basic travel insurance policies so long as consumers were aware of the fact, she said.

The trouble was that most UK consumers failed to read the small print and thought cover was always comprehensive.

"Too often people think an insurance policy means that they are insured and don't have to worry, when in fact there may be a few very important exclusions," she said.

For example a standard policy will cover travel to all EU countries but not always the African continent, which includes Tunisia a popular destination."

INDUSTRY WARNINGS

The insurance industry's own professional body, the Association of British Insurers (ABI) is also sceptical.

"We advise people not to focus on costs but the level of cover they require," said Malcolm Tarling, general insurance spokesman for the ABI.

Some policies included as introductory offers with credit cards did include extras such as ski insurance and cover for more exotic holiday destinations, but many did not.

Best practice was to assume that nothing but standard cover was offered and to check all terms and conditions.

"I think for those spending two weeks in Greece every year, it is simply a case of clarifying levels of baggage cover and that the policy is in no way going to be negated by failing to disclose medical or other information," Tarling said.

But it was a different matter for those going backpacking around Peru or regularly going on activity holidays such as diving, skiing or sailing.

"You really have to be clear on any exclusions or excesses applied to a policy," he said.

Limits may apply to baggage insurance which could affect those taking expensive golf clubs and sports equipment abroad.

Internet sites such as moneysupermarket.com provide details of policies and what they cost and allow UK holidaymakers to compare prices with the levels of cover set out.

The ABI advises holidaymakers going to EU countries to obtain the new E111 travel cover document available free at post offices.

However they note that few countries pay the full cost of medical treatment even under reciprocal health service arrangements.

On exclusions, policyholders should be aware of claims arising from ongoing medical conditions suffered before the insurance was taken out.

Other insurance that will have to be sorted out separately from a travel policy is car and breakdown cover. With a hire car this will be added to the charge; with an own car, the premium will be paid to their existing UK insurer.

__________________________________________________

By David Burrows

© Reuters 2006. All Rights Reserved.