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Travel insurance confusion clouds flight chaos

Insurers refuse to pay out for travel cancellation

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Choosing flight dates can save you money

Consumer rights may be infringed as some travel insurers and airlines hide behind a smoke screen when it comes to dealing with claims for compensation caused by ash erupting from the Icelandic volcano. While many insurers have stated that they will pay out for flight cancellations, some will not.

Some travel insurers have stated that their policies do not cover cancellations caused by natural disasters such as volcanic eruptions, or cap the total amount their provider will pay out, meaning thousands of travellers could lose out if they are forced to stay abroad for a prolonged period. 

For full details of the rights of consumers affected by the Icelandic volcano, read the expert Which? guide Iceland volcano: What are your rights?


A number of major insurers, including Aviva, Direct Line, Fortis, HSBC, and NatWest, have confirmed that they will reimburse travellers. However Aviva maintains that its decision to pay out is a ‘goodwill gesture’ as claims relating to volcanic eruptions are not usually covered. Direct Line is not alone in stating that its policies do not include a natural disasters exclusion, which is why it will pay out. Others, including Virgin Money, are classing the ongoing crisis ‘a natural disaster’, which is excluded from cover. 

No standard travel policy

The different responses to the volcanic ash crisis stems from the lack of harmony among travel policy providers. Some will cover flight disruption and cancellation caused by volcanic eruptions, others will not. Other policies are open to interpretation, which could cause consumers problems when making a claim. Some insurers, including GreenBee have confirmed that they are treating enquiries and claims from customers on a case-by-case basis. 

A GreenBee spokeswoman said: ‘We will extend the insurance period for Greenbee Travel Insurance single trip policy holders currently overseas until they can return to the UK (subject to certain criteria) at no additional cost, so that they are covered for medical or baggage costs until they can get home. Customers with Greenbee Travel Insurance single trip cover who wish to change the dates, duration or destination of their affected planned trip on their policy will be able to do so.’

According to Nick Starling from the Association of British Insurers acknowledged that the situation is confusing. He said: ‘Travel insurance policies will differ in this situation; there is no standard set of conditions which applies to a situation of this kind. Therefore 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.’

What next?

  • Consumers who are affected by the travel crisis should check their policy terms and conditions to see whether disruption caused by this event is covered. If it is not explicitly excluded, they should contact the insurer to lodge a claim. 
  • If the policyholder is stranded abroad, they should report their circumstances to their insurer as soon as possible, and keep receipts of all reasonable and unavoidable expenses they incur, such as food, travel and accommodation costs. These could form part of a travel insurance claim.
  • If the insurer refutes the claim on the basis that it is excluded from the travel insurance policy, policyholders should ask for a written explanation, referencing the relevant clause from the policy. 
  • If the policyholder is not satisfied with the insurer’s response, a should be lodged. Head all correspondence ‘formal complaint’ in email subject headings and on all letters (and on the envelope). The provider must respond to complaints within eight weeks, after which time the matter can be taken to the Financial Ombudsman Service (0300 123 9123).

Other forms of redress

Aside from travel insurance claims, travellers who are affected by the ongoing crisis should keep in contact with their airline or holiday provider. Airlines are required to try to find an alternative route, but given the scale of the current event, this may be unlikely. In any event travellers should seek a full refund for flight cancellations, and scrutinise their carrier or holiday provider’s terms and conditions. 

For full details of the rights of consumers affected by the Icelandic volcano, read the expert Which? guide Iceland volcano: What are your rights?

Card provider protection

Consumers who have paid for their flights, holiday and essential costs that have emerged as a result of being inconvenienced or stranded abroad can also lodge a claim for losses from their credit card provider (under Section 75 of the Consumer Credit Act), if the initial cost incurred is for between £100 and £30,000) or from their debit, credit or prepaid card provider (under the process). Receipts are required for claims. 

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