What does your travel insurance REALLY cover?

What does your travel insurance REALLY cover?

Many people have been left grounded - and are turning to their travel insurance provider in the hope of compensation. But what are passengers' rights if they have been affected by an event that is out of their control?

In the first instance holidaymakers who experience delays, cancellations and costs as a result of such an event will need to contact the airline provider. They will typically offer alternative flights and, where cancellations have occurred, alternative dates for your trip.

Compensation for delay and cancellation
If your flight is delayed, due to specified events such as strikes, adverse weather and mechanical defects some insurers will pay compensation, although individual claims are relatively small. Policies usually offer payouts for travel delays of typically only around £25 for every 12 hour delay, up to a maximum of around £250 to £300.

Some policies will pay out if delay forces you to cancel your trip following a delayed flight - check the policy print to see what cover you have.

In the case of the volcanic ash cloud, whether you're covered depends on your insurer. While volcanic eruptions are not an insured event in most travel policies, some insurers have been making payments for delay and cancellation on a goodwill basis or treating the event as adverse weather. Check with your travel insurer on its position.

Accommodation costs
If a passenger has a flight cancelled and is refunded from the airline, but still has accommodation that they can't cancel or use, these claims can be considered under travel delay leading to trip abandonment. But you will need to provide written official evidence to support any claims where it is reasonable to request such evidence, so make sure to keep receipts.

Of course, if your airline has offered to pay for accommodation the travel insurer will not do so too. If it has not, you may be able to make a claim - again it depends on your insurer.

If you're hoping to claim on your travel insurance for expenses accrued while stranded abroad due to the volcanic shock you're likely to be out of pocket - most insurance providers are refusing to cover these costs.

Insurers claim it is the duty of airlines to pay for bed and board for stranded passengers. Unfortunately in most cases these people will not be able to claim any shortfall from their travel insurer.

With delays and flight cancellations likely to continue into next week as airlines struggle to return to a normal service, more families may well be caught by this insurance trap.

Those planning holidays later this year may want to review their insurance arrangements in the light of these problems.

There is a marked difference in how insurance companies are handling claims at present - both for those who have been delayed getting home and those whose holidays have been cancelled completely.

Exclusions in the small print
Generally, travel insurance covers a wide range of risks, including medical treatment costs, loss of possessions, delay and curtailment. However, beware of the fine print as insurers will expect you to take reasonable care - so for example, if you leave possessions unattended, then they may not be covered if they are lost or stolen.

Also, beware of boozing on holiday. If you are drunk - which is defined as anything over the UK legal limit- your claim will not be covered if, say, you were robbed or hurt.

Making a complaint

Finally, if you have exhausted your insurance company's complaints process and still think you have been treated unfairly you could take your case to the Financial Ombudsman Service (FOS).

It will consider claims on a case-by-case basis because policies are all worded differently. The FOS will look at issues including the wordings of individual policies, and a person's circumstances when they took out the policy.