House insurance could become more expensive as a result of climate change, an insurance body has said.

The Association of British Insurers warned that insurance companies would have to pay out more for flood and windstorm damage as temperatures increased. The extra cost would in turn be passed on to policyholders in the form of higher premiums.

Wales and the south-west of England would be worst hit, the report said.

The ABI report, which used predictions from the Met Office, studied the financial effect of temperature increases of 2, 4 and 6 degrees Celsius.

A rise of 4 degrees could see the average annual insured losses from river flooding and flash floods in the UK rise by 14% to £633m by 2060, while wind storm losses could increase by 25% to £827 million each year.

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With the Christmas holidays fast approaching, the Post Office is reminding holidaymakers to take out travel insurance to cover their belongings should they be lost in transit.

According to the Air Transport Users Council, airlines could mishandle as many as 70 million bags by 2019 as the number of air passengers is set to double. Yet one in four holidaymakers still takes out no travel insurance before heading abroad.

Passengers who neglect to take out travel insurance could end up paying through the nose if their belongings go astray, as many underestimate the value of their luggage. Post Office figures reveal that passengers carry an average £1,113 worth of items in their suitcase; however, many set a much lower value on their luggage. This means that even those who have taken out a travel insurance policy may claim for much less than the contents of their suitcase are actually worth, in the event that their luggage is lost or stolen.

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An increasing number of hard-up children are staying insured on their parents’ car insurance policy into their late 20s and early 30s as the cost of premiums continues to rise.

As household budgets have been squeezed during the recession and unemployment has risen, the average age of sons and daughters registered as secondary drivers on their parents’ insurance has gone up from 25 to 31 years old.

The rise in the number of grown children adding themselves to their parents’ car insurance policy rather than taking out one of their own reflects the increasing number of youngsters who save money by continuing to live at home and take advantage of parental support.

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Cruise passengers have been urged to check their travel insurance after reports that a third do not have adequate cover.

A survey by insurance company All Clear has shown that around 34% of cruise passengers would not be fully covered by their travel insurance policy if they were taken ill at sea.

These passengers would also not be covered for pre-booked excursions that were cancelled due to ill-health, bad weather or changes to the itinerary.

Chris Blackman, head of product development at All Clear, said: ” A surprising number of people seem to rely on the basic medical provision on board ships. However, in all but fairly minor emergencies, this will not be sufficient.

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Plans to restrict the sale of the controversial payment protection insurance (PPI) have suffered a setback.

The Competition Appeal Tribunal has ordered the Competition Commission to reconsider whether a proposed ban on selling PPI alongside personal loans was appropriate.

The appeal against this restriction was made by Barclays bank, which argues that the proposed restriction on the sale of PPI limits customer choice.

PPI is designed to help cover the cost of bills and loan repayments in the event that you fall ill or are made redundant. The ban on its being sold in conjunction with the issue of a personal loan follows a two-year investigation into complaints over the high price and numerous exclusion clauses in the sale of PPI, which often aren’t properly clarified to the customer.

The Competition Commission said that it would study the appeal “closely”, but pointed out that if successful, it would affect just one part of its plan.

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A county court judge has told a lender that it cannot demand payment of an £8,000 debt, possibly paving the way for thousands of borrowers to default on repayments.

Judge Jacqueline Smart at South Shields county court has ruled that the MBNA credit card company cannot demand that a customer repay her debt. The company tried to force Lynne Thorius to repay the £8,000 she owed on her card.

However, Judge Smart decided that there had been an unfair relationship between MBNA and Ms Thorius because of the way in which the firm sold her payment protection insurance.

The credit card was sold to Ms Thorius in the official Sunderland Football Club shop in 2002, along with payment protection insurance, which is designed to cover debt repayments in case of illness or redundancy.

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The Financial Services Authority has told banks and building societies to compensate customers who may have been mis-sold payment protection insurance.

The ruling covers firms that have sold more than 40% of their “single premium” PPI policies at the same time as giving unsecured personal loans. The FSA will also target other companies that have mis-sold PPI when offering secured loans or credit cards.

The regulator has asked firms to reopen 185,000 rejected complaints about PPI.

Payment Protection Insurance is designed to cover debt repayments if you can’t work because of illness or redundancy, and is usually offered whenever you take out a loan, mortgage, credit card or store card, or bought something on credit.

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59% of all complaints made by customers against financial firms were upheld by the Financial Ombudsman Service (FOS) in the first half of 2009.

The FOS deals with complaints from customers when firms are unable to settle them themselves.

Over half the complaints registered by the group concerned the top five High Street banks - Lloyds Banking Group, Barclays, RBS-NatWest, Abbey and HSBC.

The FOS has taken to “naming and shaming” banks which receive a large number of complaints in order to force the companies to resolve more issues themselves.

“We have already been providing comparative complaints data on a private basis to the larger financial businesses - but this has led to no improvement in the standard of complaints handling by the worse-performing businesses,” said Walter Merricks, the outgoing chief ombudsman.

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Football fans who plan on attending the World Cup Finals in South Africa next year have been urged to purchase travel insurance early to cover themselves for any cancellations.

M&S Money said that many travellers need to use insurance before their holiday begins in case their flights or accommodations are cancelled unexpectedly. The insurer’s premier travel insurance policy offers up to £6,000 cover for any irrecoverable unused travel and accommodation costs in the case of illness, being called for jury service or if eave is withdrawn for customers working in the emergency services or Armed Forces.

Steve Price, M&S head of general insurance, said: “It’s great news that England have qualified for the World Cup and thousands of fans will now be looking forward to heading to South Africa next June.

“Tickets for the matches will no doubt be hot property, but fans should also think about what they would do if the worst happens. Travel insurance can provide financial support long before you step on to a flight, so England fans would be wise to invest in a comprehensive policy now.”

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One in seven motorists has lied to their car insurance company in order to reduce premiums, a new survey has revealed.

According to research by insurer Salaam Halal, some 14% of drivers admitted that they or their partner had deliberately submitted false information in order to benefit from cheaper insurance.

The worst culprits came from Wales, where 21% of drivers admitted they were likely to lie when applying for insurance. People living in the East of England were most truthful, with only 10% of motorists providing false applications.

People most commonly lied about the location of their car when applying for insurance, with 39% of those who had been dishonest claiming they parked their car in a garage, when in fact they kept it outside.

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