It doesn’t really matter if you are a backpacker, an adventure traveller, a tourist or even a business traveller - travel insurance is vital.

However, it’s very easy to take out an insurance policy only to discover that you are under-insured for some risks - or, even worse, your policy doesn’t cover some activities.

The Consumer Action Group (CAG) has recently demanded that insurance companies must be clearer with customers when selling travel insurance.

It cites the case of a 19-year-old man who crashed a moped in Vietnam but his insurer refused to pay out.

The insurance firm involved said the policy “clearly stated” that the driver must have a full UK motorcycle licence.

The warning from the CAG comes as millions of gap year students and schoolchildren prepare to take their holidays this summer.

CAG group highlighted the example of gap year student James Pinnington, 19, who crashed his moped in Vietnam in May, breaking both his legs.

Although James had what he thought was comprehensive travel insurance, held a full driving licence and was wearing a helmet, his insurer refused to honour the claim because he did not have a full UK Class A motorcycle licence.

Officially any class of UK or international driving licence would not apply in Vietnam and local moped and car users are required to have separate licences, although these laws are not strictly applied in practice.

James’s father Chris had to pay £25,000 to transport his son from a remote village in Vietnam to London via Bangkok.

Before taking out any travel insurance we strongly suggest that you ask for a copy of all the relevant documentation. Make sure the policy provides you with adequate cover for the activities that your journey will include.