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Iceland Volcano Update: What You Need to Know About Insurance

December 6, 2011 By: Jena Tesse Fox

As travelers and their agents alike anxiously wait to see if Katla, the volcano covered by a glacier in Iceland, will erupt as it seems poised to do, the question of travel insurance and what it will (or will not) cover is once again buzzing.

The Guardian is pointing out that the volcano still has not erupted, so travel insurance experts are advising that policies that include cover for ash-related delays should pay out if you purchase them now.

Daniel Durazo at Access America told Travel Agent that what an insurance company will offer an affected traveler depends on the policy. Travelers can cancel or interrupt their trip if their airline, cruise line, tour operator or other travel supplier stops offering all services for at least 24 consecutive hours where they are departing, arriving or making a connection because of a natural disaster—such as a volcano interruption, he explained. Trip cancelation coverage would cover non-refundable payments and deposits, while trip interruption coverage would cover the unused part of prepaid expenses less any refunds received.  For trip interruption, travel insurance would also cover reasonable transportation expenses for getting to your final destination or a place where you can continue your trip or your original destination another way, up to the limit of your policy.

For customers that have insurance policies that include Travel Delay, that benefit kicks in when they are delayed for six or more hours because their departure is delayed by the airline. The travel delay benefit pays for reasonable meals, accommodation and transportation expenses up to the limit of the policy.  Travelers could use this benefit to stay in a hotel or travel to another airport. For service interruptions as severe as last year's ash cloud crisis, Durazo said that Access America would cover transportation costs to airports that are still open. "We would pay for you to get home," he said.
It is important to note, of course, that insurance must be purchased before any crisis begins, so agents should advise their clients now about the potential for another eruption in Iceland. Durazo also encourages travel agents and their clients to read any insurance policy very carefully, and to take time to ask any questions they might have of an insurance agent.

The Guardian advises travelers to be prepared for a fight, as some consumers are still fighting for compensation from their travel insurer for claims made from the Eyjafjallajokull in 2010.

It is also worth noting that the volcano's current rumblings do not mean that it absolutely will erupt within the next few days or weeks or even months. In fact, it could be years before we see an eruption like the devastating one of 1918 (pictured above).

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About the Author

Jena Tesse Fox
Jena Tesse Fox covers Europe, Africa, Australia/South Pacific and business travel for the Questex Travel Group's publications. The daughter of history teachers, she can spend...

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By Jena Tesse Fox | December 6, 2011
Katla in Southern Iceland still has not erupted, but the possibility of another ash cloud is a good incentive to discuss travel insurance options with your clients.
Filed under : Air Travel, Iceland