Volcanic Ash: Are You Covered By Travel Insurance?

Surely no one could have imagined the havoc that a volcano erupting in Iceland could cause on air travel to and from and within Europe. Airports from London to Zurich and all points in between and further afar are closed due to the ash cloud that has drifted across Europe. You are wise to insure your travel plans, but your travel insurance may, or may not, cover you, as outlined in the following email I received today from John W. Cook, President of QuoteWright.com®.

Travel Insurance policies contain 4 separate coverages that might apply:

-- trip cancellation,
-- trip interruption,
-- missed connection,
-- travel delay.

All 4 of these are "named peril" coverages which will only provide coverage if the claim was caused by one of the specific covered events.

The ash cloud caused by the eruption can be classified as either a "natural disaster" or an "adverse weather" event. This classification can have a big effect on coverage for trip cancellation and interruption coverages. Under those coverages some, but not all, companies include "natural disasters" which causes your airline to cease operations to be a covered event. Most of the plans limit coverage for "natural disasters" that make your destination uninhabitable.

A more common covered event is "adverse weather" causing your airline to cease operations for a specific time period (usually 24 hours). If the event is interpreted to be a "natural disaster," coverage might be limited for trip cancellations or interruptions unless it's one of the plans that include "natural disasters" in their covered events that causes your common carrier to cease operations. Otherwise the question is did it make your destination uninhabitable?

Coverage for travel delay and missed connection is clearer. These coverages are also "named peril" benefits however, the majority of plans include "natural disaster" as a covered event.

Bottom line is to read your plan carefully and don't assume that there will or will not be coverage.