Icelandic VolcanoSo the first thing you think when you read the title of this post is that the insurance industry has got a bad name already. You’re probably right but the antics of the volcano that sits beneath the Eyjafjallaj√∂kul glacier in Iceland is not going to make it any better for us insurance guys.

How can an Icelandic volcano give UK insurers a bad name I hear you ask. Well, it’s all down to the disruption that the ash plume is causing to air travel in Europe. If you don’t know by now, the eruption has sent a huge ash cloud over the UK and beyond and has grounded all flights in the country for the last few days. All these cancelled flights are causing a huge amount of claims on travel insurance policies for people stranded in foreign countries trying to get home to the UK or people who are in the UK finding that their holiday has been cancelled before it has even begun.

The unfortunate situation is that with most insurance companies that provide this type of cover, claims involving all sorts of natural disasters or incidents are excluded. A volcano erupting is quite obviously a natural occurrence so most will find that their policy provides no cover for the consequences of this event. This is going to leave a huge amount of people left without compensation for the additional expenses they may be lumbered with for rearranging transport or paying for accommodation while stuck away from home.

I have heard that a few insurers have declared that they will pay out claims related to the ash cloud situation which is a huge goodwill gesture to all their customers but I can guarantee that this will be overlooked as most people will “expect” their insurer to pay out. Instead, all we will hear about is that the insurance industry are getting out of paying claims yet again.

If you are a policyholder about to make a claim on your travel insurance policy then please read your insurance policy first to see if natural disasters are excluded or not as this will prepare you for what reply you can expect from your insurer when you put the claim in. You may be lucky enough to be with one of these insurers that is paying out regardless but be prepared to have your claim rejected.

There is a growing expectation that an insurance policy covers everything to do with the risk it is covering but you will find there are many exclusions that differ from insurer to insurer and this is why it is important to read a policy before you take out cover. When you have a claim refused and it is written in black and white in the policy you were told about and/or given to read, please don’t blame the insurer. It is always the bad things we hear about insurance companies and very rarely about all the money they do pay out so perhaps next time you get paid out swiftly, honestly and to the amount you were expecting, let everyone know that we’re not all bad!