Will your travel insurance cover monetary fallout from volcanic ash?

does your travel insurance cover the volcano?With some European air service resuming today or tomorrow, the next few days will likely be dominated by news regarding how travel insurance companies are dealing with what volcanic ash did to people's travel plans. The short answer: Well, there is no short answer.

Several large travel insurance companies said call volume skyrocketed to 50% higher than normal this weekend as stranded passengers grappled with whether their plans would pay out for mounting hotel, transportation and food costs. Some travelers even reported that their hotel costs went up overnight, in some cases leaving them broke.

More popular providers, such as CSA Travel Protection, Access America and USI Travel Insurance Services, said that they would cover trip delays, cancellations and interruptions that resulted from the unprecedented days-long closure of European air space as the ash cloud from Iceland floated southward.

But the devil is in the details. Travelers would be wise to read their policies carefully.

"Policy language is going to vary substantially from carrier to carrier," said Bob Chambers, operations executive with San Diego-based CSA Travel Protection. "CSA sells a bunch of policies through different channels and different distributors -- there's a lot of variety."

Travelers should check for coverage under trip delay, as well as trip cancellation and trip interruption. In each of these cases, the payout might vary depending on the circumstances that prompted them to file a claim, how much they paid for their trip -- and for the policy -- and when they purchased it.

In this instance, CSA, as well as several other large carriers such as Travelex and HTH Worldwide, consider the volcanic eruption worthy of coverage -- as long as travelers purchased their policy prior to April 13 -- and are classifying it as a weather-related incident. So, travelers with these policies who file for coverage of costs that resulted when their trips were delayed should receive reimbursement.

When trip delay coverage kicks in, however, varies by carrier. Some require six hours, like Access America, to have elapsed before they will honor claims for delays. After the initial six hours, the carrier will cover up to $150 per person, per day for delays, said Daniel Durazo, Access America's director of communications.

Some policies also have a maximum payout that they will provide to travelers for travel delays. USI will pay out from $750 to $1,500 total, depending on what type of policy a traveler purchased, said Kathy Khalik, the company's vice president of operations.

USI's travel delay coverage kicks in after a passenger has been stuck for more than 12 hours. After a traveler maxes out their trip delay coverage, trip interruption coverage may kick in if it's included on the policy, Khalik said.

As for trip cancellation, CSA, Access and USI said they would cover vacations that were canceled as a result of the volcanic eruption. Claims filed under this category would pay out 100% for non-refundable deposits, including air fare. What also varies is the time that insurance carriers require to have elapsed before this coverage kicks in.

"Trip cancellation comes into play when there's a cessation of services for 24 consecutive hours," Durazo said.

Purchasing travel insurance is becoming more popular among American globe trotters, with one in four travelers typically buying policies that average about $200, said Chris Harvey, chief executive of squaremouth.com -- a site where travelers can compare plans. In Europe, however, the majority of travelers who go abroad buy into one of these plans.

Organized travelers who have already filed claims because of snafus caused by the volcano eruption said they've been told it could take at least four weeks to process their paperwork.

Author Lori A. Moore purchased a $127 policy from Travel Guard to insure a more than $2,400 European cruise that started in Louisville last week ... and ended a few hours later in Minneapolis, when she discovered her flight to Amsterdam had been canceled.

"They can't say for sure, but they believe the cruise will be covered 100% and the air fare will be covered less the round trip for the first leg we flew from Louisville to Minneapolis," Moore said.

Insurance policies like Moore's typically cost between 4% to 10% of the entire trip price, if you include trip cancellation coverage, Harvey said. The price rises as a person gets older, with travelers in their 50's, 60's and 70's typically buying the most policies.

Meanwhile, travelers held their collective breath this week as they waited to see if they would be able to take much-anticipated trips.

Travel agent Paul Seiferth said that he's representing a group of 57 who are eagerly awaiting a cruise down the Viking River slated to start this weekend. In the meantime, he's keeping close contact with their insurer, Travelex, to see what the group's recourse is if they have to cancel.

"This event is so new and unprecedented and effects so many people that I think everyone in travel is trying to decide the next step," he said.
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