Eruption disruption: Has your insurer refused your claim?

Have you had an ash-related insurance claim rejected? Much like the plume of volcanic ash spread across Europe, news of air traffic suspension and stranded travellers has clouded the news for the last week.

So what recourse is there for frustrated travellers? Well, flights and package holidays tend to be refundable through the airlines and travel operators. But what about additional expenses, such as hotel bookings and car hire, which weren't paid for as part of a travel package? And, indeed, compensation for delay? Well, this is where one would traditionally rely on travel insurance.

However, many travel insurance providers haven't been paying out. Perhaps you've tried to make a claim, been unsuccessful, and found this unfair. Well, you may be interested to learn that the Financial Ombudsman Service (FOS) has requested that rejected claimants copy them into disputes. So if you have a legitimate claim, and you feel that your circumstances aren't covered by the exclusions, you weren't sufficiently notified of the exclusions relied on (if they were buried deep in small print, for example), or indeed that the exclusion is just unfair, then it's a good idea to copy the FOS into emails or your letters from the get-go.

Although copying them in obviously doesn't guarantee you a payout, it does at least ensure that you should be treated fairly. Plus, this sets the clock ticking as your insurance provider will have to get back to you within eight weeks. And, if you've got a good case, the FOS has the ability to intervene and rule in your favour.

The FOS contact page is here, and they can be contacted by email, snail mail or fax; although they recommend phoning them on 08000 234 567 (for landlines) or 0300 123 9 123 (for mobiles) as they will be able to speak to you quicker, and best advise on how to proceed.

As with all dispute resolution, when lodging a complaint try to include all the relevant facts from the outset. It's worth keeping a copy of all correspondence, plus any receipts from any costs you've incurred as a direct result of this incident. And - most importantly - keep your head!

Was it an Act of God?

Some insurance providers have invoked Act of God, which is a clause that is sometimes used for protecting insurers from paying out vast sums in the event of a natural disaster. Though seldom worded as ‘Act of God' in policy documents nowadays, in correspondence we've received from some providers, it's apparent that the concept is still in currency. Act of God may also be called Force Majeure, Catastrophe or Act of Nature; but whatever insurers choose to call it, it amounts to the same thing - an unpredictable natural event over which man has no influence. The basic justification for such a clause is: why would an underwriter want to shoulder the risk of a potentially limitless payout for an event that was beyond anyone's foresight or control?

If you have had a claim rejected due to what you suspect to be an Act of God clause, it might be worth checking the policy wording to see what has actually happened is specifically excluded, as exclusions tend to be listed by name. If not, you may well have a strong case. It might also be an idea to argue that the air traffic disruption was, in fact, caused by adverse weather.

Was the standstill caused by adverse weather?

Some providers have argued that policies do include delayed departure due to ‘adverse weather conditions', but that the eruption does not qualify. And yet the plume of smoke has been carried across the continent by wind, which is obviously generally regarded as weather. Plus, if it's not a weather condition, why is the Met Office issuing advice? It is surely arguable that the eruption couldn't have grounded so many flights if it hadn't been in combination with the weather conditions?

Plus, this type of hair splitting can't look good for the insurers responsible. So it may well be worth pushing the point with your insurer that you believe it is a weather-related issue, and be sure to copy the FSO into your communications.

If your dispute isn't resolved to your satisfaction, should you lose faith in travel insurance? The short answer is no. Although taking out cover isn't compulsory, Confused.com has always taken the line that travel insurance is important enough for consumers to treat it as such. You are far more likely to have your bag stolen or have an accident on holiday than be subject to a natural disaster, and - despite the immediacy of recent events - this is the type of thing it's smart to insure against.