26 May 2011

Travel Insurance Policies Vary in Cover

Holidaymakers are being warned many travel insurance policies do not cover the cancellation of flights due to the Icelandic volcanic ash cloud.

Holidaymakers are being warned many travel insurance policies do not cover the cancellation of flights due to the Icelandic volcanic ash cloud.

The eruption of the Icelandic volcano could not have come at a worse time for holidaymakers preparing for bank holiday breaks abroad, or half term holidays.

Research by Defaqto has revealed travel insurance policies differ considerably as to the amount of cover they provide for the delay or cancellation of a holiday due to the ash cloud.

"The Icelandic volcanic eruption could potentially impact many holidaymakers over the coming days,” commented Mike Powell, Defaqto's Insight Analyst for general insurance.

"For anyone that has already been or may be affected, it is important that they review their policy to check whether they are covered for ash cloud-related disruption and, if so, what level of cover their policy will provide.”

If a holiday has to be abandoned due to the ash cloud causing cancellation of flights, 40 percent of single trip policies provide £5,000 cover or more for the cost of the holiday, 14 percent offer less than £2,000 and 12 percent, no cover.

While slightly more annual trip policies, 51 percent, offer cover of £5,000 or more towards the cost of the holiday, 14 percent offer less than £2,000 and one percent of policies provide no cover for this occurrence.

When a flight is delayed, holidaymakers may be faced with other costs they had not expected to pay or budget for, such as food and drink. Twelve percent of single trip policies provide no cover towards the cost of food and other expenses, while 25 percent of policies that do provide cover provide £100 or less.

While annual policies – nine percent – provide no cover towards these expenses, and 22 percent of policies that do provide cover provide £100 or less.

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