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What does travel insurance really cover?

What does travel insurance really cover?

In recent years, hundreds of thousands of holidaymakers’ travel plans have been plunged into chaos following a variety of events including snow, strikes and volcanic ash clouds.

Many people were left grounded and turned 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? What does your travel insurance cover?

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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 a 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 make payments for delay and cancellation on a goodwill basis or treat such an 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 a volcanic eruption 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.

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.

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