Will travel insurance cover terror delays?

Even if your holiday was ruined by the airport chaos sparked by the terrorist threat, you probably won't be covered by your travel insurance. Plus - whay chip and pin hasn't prevented card fraud, and the scandal of payment protection insurance.

The recent terror alerts that sparked chaos at airports across the country not only disrupted travel plans, but also affected insurance claims. Regardless of how badly delayed you were, the majority of insurance policies will not cover acts of terrorism.

Most airlines whose flights had to be cancelled following the security alert pledged to offer stranded passengers refunds or alternative flights, says Jessica Bown in The Sunday Times.

Some people might prefer not to travel when there is such a state of alert, but airlines are unlikely to offer you a refund if you cancel for this reason. You will probably have even less chance of success with your travel insurer, although, according to Rupert Jones in The Guardian, home policies will pay out if your trip is delayed by more than 12 hours. Check the terms of your policy, or contact the firm direct if you were caught up in the alert, or if you plan to travel over the next few days.

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Chip and pin fails to beat fraud

Chip and pin cards have been mandatory for six months but card fraud over the internet, phone or by mail rose by 21% last year as criminals swiftly sought other ways to part us from our cash. Many cloned cards are now taken abroad to countries where pin numbers are not yet used.

Some high-street banks are fighting back, says Lisa Bachelor in The Observer. Barclays and Lloyds TSB are thinking of giving some customers hand-held devices that will electronically generate a one-off password when they log onto their account or shop online.

And some firms are testing a new device to prevent shoulder surfing where someone watches as you punch in your pin. The device was designed by the University of Warwick and incorporates a magnifying glass that helps the user see the keys, but distorts the view of the keypad for anyone else.

The payment protection insurance scandal

The Office of Fair Trading has just published a damning report into payment protection insurance and not before time. Lenders are keen to sell you this cover when you take out a mortgage, personal loan or credit card. The cover is supposed to pay out if you can no longer keep up the payments because of sickness or unemployment. However, the policies are often costly and riddled with exclusions.

The Office of Fair Trading wants to reform the sale of payment protection insurance, and will come up with some recommendations by the end of the year, says Helen Loveless in The Mail on Sunday. It should start by banning firms from automatically including the insurance when they quote the monthly loan repayments.

Naomi is a money expert and personal finance journalist with more than 20 years of experience in the industry. In her time she has written for The Times, Herald Scotland and MoneyWeek, and Naomi is currently at MoneySuperMarket as a money expert. Naomi shared her expertise on personal finance topics from travel insurance to the best savings accounts on MoneyWeek.