Concerns that some home and travel insurance policies are being chosen simply on price have been raised by a committee, which said efforts to help consumers understand products should be improved.

The House of Lords Financial Services Regulation Committee raised concerns in its report about a lack of consumer understanding about what is and is not covered by policies, with a focus on price rather than the value that people are getting from different levels of coverage.

The lack of awareness contributes to claims being declined, the report said.

Price competition has led to the “hollowing out” of insurance products, where products have reduced levels of cover so they are more competitive on price, the committee said it had heard during its inquiry.

The committee said home and travel insurance can cover a wide range of risks, particularly compared with other products such as car insurance.

It also said it had heard from a range of witnesses, including insurance companies, that there were particular…