Iceland Volcano not covered by travel insurance

Travel On The Dollar
April 20, 2010  •  4 min(s) read

Update 2:
The US Travel Insurance Association reports that most of its member companies are providing coverage to travelers affected by trip cancellations and delays arising from the volcanic eruption in Iceland. To qualify for coverage, the travel insurance policy must have been purchased prior to the volcano eruption.

Read more at: Most Travel Insurance Companies Covering Travelers Affected by Iceland Volcano Eruption Says US Travel Insurance Association

We just read this post on a UK-based website that Co-operative Bank will honor travel insurance claims for volcano ash. Here’s what the post says:

The Co-operative Insurance said its travel insurance customers will be covered on an ex gratia basis, subject to standard policy limits. “Although the volcanic eruption would not be ordinarily covered under The Co-operative Insurance’s travel policy, as a customer centric organisation we have taken the decision to honour any customer claims on an ex gratia basis for the delay or cancellation of flights and/or accommodation,” said a statement issued by the insurer. “We would also advise customers to contact their flight provider or travel agent directly.”

Customers with a Co-operative Bank or smile packaged current account have been told they will also be covered for their travel insurance on a similar ex gratia basis.

Read more at: Travel insurers to honour volcano ash claims

Also read: Direct Travel Insurance to Pay Claims for Travellers Impacted By Volcanic Ash Cloud

Original Post:


We all know how much chaos the Iceland volcano has created in the last few days. Sources say that an estimated 7 million passengers are stranded world-wide because the airlines have grounded the planes. To add to the woes of these cash-stricken passengers, travel insurance companies are refusing to cover claims brought on by the disaster, says the Wall Street experts.

Here’s what the Wall Street Journal says:

As of April 13, travel insurance policies generally stopped covering the disruption that resulted from the ash cloud from Iceland.

It’s called the theory of the burning house. If your house is ablaze, you can’t go out and quickly buy homeowners coverage. In travel, as soon as a storm or event is known, you can buy all the insurance you want but it won’t cover those “known’’ events. Once a hurricane is named, most policies won’t cover it if the insurance was sold after the moment the storm was identified.

“In general, travel insurance policies don’t cover events related to natural disasters that are in progress or that have just happened. Even an approaching hurricane wouldn’t be covered if officials have already given it a name,” said Chris Harvey, chief executive of, a travel insurance comparison site.

Even if purchased before April 13, travel insurance can be of limited utility to travelers. If airlines refund tickets for canceled trips, for example, there’s no claim with insurers. If you haven’t left home, you won’t get money for hotels and accommodations under most policies. And many policies have limits on daily expenses if you are stranded away from home.

Are you stuck and reading this? Did you purchase travel insurance before this calamity? Send us your thoughts by comments.

Read original post: Travel Insurance Warning: No Ash Coverage Anymore
Also read: Insurers See Millions in Claims by Travelers

Travel On The Dollar