When your overseas trip goes up in smoke, how your travel insurance works

By John Grant

There have been many recent examples of events around the world that have caused major travel disruptions. But nothing compares to the recent shut down of most of the northern European airports due to the Eyjafjallajokull volcano in Iceland.

In much of Europe and the UK, airlines have been grounded for a week and over 95,000 flights have been disrupted. The cost of this is significant and all around the world the flow-on disruption has been enormous. In Singapore for example, some hotels were putting 2 couples in a room, complete strangers who had no alternative but to bunk up together as all other accommodation had been taken. People travelling to see ill relatives could not make the trips, weddings had to be cancelled and holiday plans for hundreds of thousands are in disarray

So it’s just as well there is insurance. Travel insurance is designed for this very type of incident. If an ‘Unexpected’ event occurs that disrupts travel plans then most travel policies allow you to claim.

The key part of this is that it must be “Unexpected”.

Southern Cross Travel, for example declared this as being a known event on April 15. Therefore policies purchased prior to this date are regarded as operative for Cancellation and Postponement cover, but if you purchased the policy after April 15 then you will not be able to claim for any loss or costs you incur from travel disruption flowing from Eyjafjallajokull (go on, try saying it out loud).

Under most travel policies you do have an option of how to claim. You can cancel the travel and apply for refunds from your airline or your agency, or you can postpone travel. Any costs related to postponing are claimable under the policy. The catch here is if you claim for postponement then you will not be able to claim for postponement a second time. You are normally limited to one postponement claim per event.

Under the standard policy you are able to seek reimbursement for the following;

Cancellation costs: You will be reimbursed for all cancellation costs after deducting refunds due from the travel providers. This in some policies includes forfeiture of frequent flyer points.
Curtailment of Journey: The policy will reimburse you for actual costs associated with cutting short your journey.  This includes additional telephone and accommodation and associated expenses.
Travel Interruptions: If your journey is interrupted for a period (normally 36 hours) then you can claim additional costs for accommodation, telephones, meals etc.
Resumption of travel: In some cases you can get reimbursement for the additional costs of resuming travel. This is heavily conditioned with requirements such as, not otherwise claiming on the policy, and being less than 50% through the journey when it was curtailed.

There is also cover for travel delays (normally after 12 hours and less than 36 hours), missed connection costs and special arrangements to get to an event that was the key reason for travel.

In summary, if you have purchased travel insurance before the event is known and you are now caught up in the delays you will almost certainly be able to claim. It would seem that the best option will be to cancel your arrangements and re-book for a later time. Check with your travel insurer. Before you call them, get your policy out and have a good read of what the insurer has committed to.