Volcanic disruption: Are You Covered by Your Travel Insurance?

Volcanic ash disruption may pose confusion to travellers who have been affected. The common puzzle is what they can rightfully claim from the disruption. Some of those who have been affected by flight cancellation may have the option to refund or rebook their flight. However cancelled prepaid hotel bookings or hired cars are other concerns altogether.

It seems that it is a matter of luck whether or not your insurer will view your claim sympathetically. On one hand, some are treating the volcano as a “weather phenomenon” and therefore the claim as one arising from a delay which led to abandonment of the holiday. Others, however, are classifying the volcano as an “act of God” or “force majeure”, both phrases that will have the traveller’s heart sinking as this means that the insurance company will not pay for any losses arising from the event.

For those trying to get home, airlines have a duty to provide stranded passengers with food and accommodation. Package tourists are generally better provided for with many able to extend their holiday, all expenses paid.

But anyone who has taken out insurance since midday of the day when the restrictions on travel came into force, will not be covered for any claim relating to the volcanic ash, since the insurance was purchased after it became clear that there would be a problem.

Some insurance companies such as HSBC, M&S Money and First Direct have led the way in accepting liability, even though such matters are not normally covered. A spokesman for HSBC said “we at HSBC believe that standing behind our customers on this extraordinary occasion is the right thing to do at this time”. Very generously put indeed!

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