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Travel insurers braced for more ash-related claims

06 May 2010 10:44:16

Another cloud of ash has moved into UK airspace. image
Another cloud of ash has moved into UK airspace.
The closure of much of Europe's airspace for almost a week last month created chaos for airline passengers and financial misery for travel insurance companies. New estimates from the Association of British Insurers (ABI) suggest that insurers may pay out as much as £62m to passengers whose flights were cancelled as a result of the Icelandic volcanic eruption. This figure may rise even further and cause more confusion for policyholders, now that airports in parts of Scotland, Northern Ireland and the Republic of Ireland have been forced to shut again by a fresh cloud of ash from Eyjafjallajokull.

Passengers' rights

The Civil Aviation Authority has described the situation as "changeable" and urged passengers expecting to travel from airports in Scotland, Northern Ireland, the north of England and north Wales to "contact their airlines to check whether their flight is operating".

On the subject of passenger rights, it says that any traveller whose flight is due to depart from a European airport, or who is flying with a European airline from an airport outside Europe, is covered under EU rules. The EU Regulation on Denied Boarding and Cancellation means passengers are entitled to have the full cost of their ticket reimbursed, or to be re-routed to their final destination at the earliest opportunity.

The EU regulation also provides certain entitlements to meals and refreshments during the delay, hotel accommodation and telephone calls. Passengers who are not covered by the regulation are advised to check their airline's terms and conditions, as well as their travel insurance policy.

Insurers' reactions

There has been a varied reaction from travel insurance companies, some of which have refused to provide cover for claims relating to the volcanic eruption. Others have made the decision to treat the ash cloud as a weather-related event and pay out accordingly, with Barclays covering "reasonable costs while away" and Marks & Spencer joining several other insurers in paying out for accommodation and travel costs.

Aviva has agreed to consider a "goodwill gesture" of up to £250 per delayed passenger, stating that it wants its customers to be "treated as they would expect to be". However, some companies such as Insure and Go and Virgin Travel Insurance have stuck to the letter of their small print, with the latter explaining that "natural disasters are not included and therefore cover is not available under the terms of our policies".

Nick Starling, director of general insurance and health at the ABI, admitted that there is no standard set of conditions for a situation of this kind. He advised: "Customers should check their travel insurance policy and speak to their travel insurer to understand what their individual policy covers them for in this situation."ADNFCR-2196-ID-19761095-ADNFCR ADNFCR-2196-ID-19464191-ADNFCR

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