Residents in the popular holiday destination Hong Kong on Friday

The major travel insurers have cancelled cover for contracting the Sars virus on trips to China, Hong Kong and Toronto.

The insurers say they have taken the measure following Foreign Office (FO) advice against travel to the infected areas.

A spokeswoman for Direct Line Insurance said: "At the moment we are advising our customers not to travel to these areas.

"If they do and contract Sars, they will not be covered."

The insurers say they will continue to issue insurance which will cover other eventualities such as lost luggage, cancellation and non-Sars related medical expenses.

Refunds

They will also offer the choice of a refund for holidays to infected destinations or the option to defer the trip to a later date.

The Direct Line spokeswoman said on Friday: "We had a man this morning who was due to go to Canada for a wedding next week.

"Obviously, he didn't want to take the holiday at another time, so we gave him his money back."

This is restricted to one country and one city - nowhere else is affected Sean Tipton ABTA Sars hits Toronto's tourism

American Express says it will still cover people for medical expenses if they contract Sars, despite the FO warning.

But it will not offer refunds to people who want to cancel their trips and is referring people to their travel agents to arrange alternative holidays.

The Association of British Travel Agents (ABTA) said it was "normal procedure" for insurers to cancel cover on FO advice.

The option to defer trips to China and Hong Kong will run until 23 May and for a week to Canada.

ABTA spokesman Sean Tipton said: "There is a strong feeling in the industry that the World Health Organisation will change its advice on Toronto soon.

"But if it doesn't, we will extend the period for deferrals.

A masked Briton returns to the UK from Beijing

"We will also be monitoring the position in China."

He said holidaymakers on package trips would have a third option of changing to another destination of the same value.

Mr Tipton said: "There's no need for clients to worry about being charged cancellation fees or worry about travel to Canada and the Far East in general.

"This is restricted to one country and one city - nowhere else is affected."

The FO advised on Thursday against travel to Hong Kong, Beijing, Shanxi Province and Guangdong Province in China, and Toronto in Canada, which have been at the centre of the Sars outbreak.

For the moment, Singapore, which has had 19 deaths from the virus is not on the list because authorities have instigated a strict quarantine of victims.