I remember Thomas Cook tried that on me a few years ago. They said if I wished to travel with them I needed to take out travel insurance and of course their's was the best and cheapest. I just said fine as I was going to Belgrade which was still considered a war zone at the time and they soon changed their minds. Tell them if they insist on insurance you will go elsewhere and see their attitude change. The last time I used Thomas Cook they had me sign a form to say that I had declined their insurance but I don't know if they still do this as I stopped using them.