After the emergency ban on cabin luggage as part of tough new air security controls, most insurance companies said that they would treat passengers sympathetically. But within 24 hours of the terror alert The Times has learnt that companies have decided to harden their position.

Insurance industry insiders say that companies are reluctant to announce blanket payouts for loss of valuables in these special circumstances because they think that passengers will exploit any relaxation of policy and have a field day with claims. Consumer groups predict scores of complaints from passengers about insurance companies failing to meet claims for losses.

The Air Transport Users Council believes that companies will attempt to pass the buck and it expects to be flooded with complaints from passengers about unresolved disputes in the next few weeks.

The problem has arisen because under travel insurance cover there is usually an exclusion for valuables that have to be kept in the personal care of the policyholder. Items generally without cover include: jewellery, antiques, precious metal or stone items, watches, binoculars, telescopes, games consoles, mobile phones, audio, audiovisual and photographic equipment, video cameras, computers and televisions. Many travel insurance companies were adamant yesterday that it will be the responsibility of the airline to cover losses because they have accepted valuables into the hold.

Under international rules an airline is liable to pay up to a maximum £850 in compensation for loss of luggage, a sum agreed as part of the Montreal Convention signed by the European Union two years ago. This replaced the former Warsaw Convention, which compensated losses based on a weight value of £15 a kilogram. The latest £850 figure, however, was calculated on the basis that expensive laptops and video cameras are transported by the passenger in the cabin, not as part of hold luggage. Travel insurance policies generally have an upper limit of £1,500 to cover all losses, and cover for valuables is about £400 to £500.

Passengers therefore stand to lose hundreds of pounds if a video camera or laptop goes missing. Claimants also have to go through an arduous process to prove their loss, with airline companies demanding proof that an item was in luggage.

A British Airways spokeswoman said last night: “We are bound by the Montreal Convention but we have no plans to reimburse for loss of valuables that are held in the hold. This is not something we have introduced but this has been forced on us by the Department for Transport. Anyone booking with BA online may be able, however, to buy cover from our transport insurance company, Preferential Insurance.”

EasyJet said that it expected passengers to have their own travel insurance policy, but that anyone with complaints should contact its customer services.

James Fremantle, the Users Council’s industry relations manager, said: “Passengers with claims can expect to be passed around between the airline and their travel insurance company . . . We are urgently looking into this.”

An spokeswoman for the Association of British Insurers said that many travel insurance companies will have to review their policies for valuables if these emergency arrangements become the norm. She advised passengers not to take valuables that cannot be replaced, adding that those who chose to take the risk should ensure that they had warranties and proofs of purchase. She suggested taking a photograph to prove that the items were in luggage.

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