Top pick insurer Direct Travel closes for new business - here's what existing users should know

MSE Update, 7.34pm, 13 October 2015:This news story was originally published on 11 September 2015, but it has been checked and updated today.

Direct Travel Insurance closed its business for new customers last month, but if you've an existing policy, you'll continue to be covered until renewal when the policy will lapse.

Direct Travel, which sold single and multi-trip policies as well as winter sports and cover for some pre-existing conditions, last month posted a message on its website stating: "We're sorry – Direct Travel Insurance is no longer offering new purchases of our travel insurance products".

However, it confirms that all existing consumer travel policies will remain valid during the period of cover and that customers will be "fully supported by our customer services team", including emergency travel assistance.

We asked Direct Travel, which is part of the AIG group, how many existing customers are on its books but it refused to tell us, saying the information's "commercially sensitive".

Until the announcement last month, Direct Travel was our top value pick for travel insurance and has regularly featured as a top pick in recent years. See MoneySavingExpert.com's Cheap Travel Insurance guide to get an annual policy from £13 or family cover from £28.

If you've just renewed or have a current policy with Direct Travel, here's what you need to know.

My policy expires soon. Can I renew it?

While customers whose policies expired on or before 10 October were given the option to renew with Direct Travel, those whose policies expire after 11 October are no longer be able to renew them via the insurer.

In this instance, you'll receive a letter three weeks in advance of the policy end date telling you that you won't be able to renew and that you should look for alternative insurance cover. See our Cheap Travel Insurance guide to compare prices.

Direct Travel won't otherwise be notifying existing customers about the move.

I've just renewed my policy – was it safe to do so?

Direct Travel told us that all existing policies will be honoured up until the date they expire.

The Financial Conduct Authority (FCA), which regulates the insurance industry, confirms that "while a firm is providing financial services, including ongoing policy support or claims handling, they will continue to be regulated by the FCA and must adhere to our rules."

Can I amend my policy and still make a claim?

If you have an inquiry relating to your existing policy, you can call Direct Travel on 0333 300 0029 or enter your details on its online contact form. Direct Travel says "customers will continue to receive full policy servicing, travel assistance and claims service for the duration of their policy".

Direct Travel says that amendments to policies, for example you've EU cover and you want to extend it to worldwide cover, will be considered on a "case-by-case basis".

The insurer had given customers until 10 October to request any upgrades and changes to their policy, which it said it considered on a "case-by-case basis".

Can I cancel my policy?

Anyone who wants to cancel an existing policy should be able to do so (as long as you've not made a claim before requesting to cancel) and Direct Travel says you'll receive a pro-rata refund – however you will be charged a £15 administration fee for doing so.

Direct Travel Insurance exits the market - here's what you need to know

What does Direct Travel say?

An AIG spokesperson says: "As a global company, AIG periodically analyses market conditions to ensure we concentrate our resources where we are able to provide market-leading products for the right return.

"After careful consideration and an in-depth review, we have decided to continue writing group travel and personal accident insurance in the UK but no longer write direct to consumer individual travel and personal accident insurance in the open market in the UK.

"We will ensure a smooth transition through this change and we are working with all connected parties, including consultation with our employees, to avoid customer or market disruption."

Additional reporting by Anthony Forchione.