Volcanic ash shows need to pick the right travel policy

AEROPLANES might be returning to the skies once again, but for many business travellers and holidaymakers who have been stranded abroad or had their plans disrupted, the fallout is only just beginning as they start the process of claiming back their money.

While the volcanic eruption was an unprecedented event, it has brought home the fact that unexpected events can and do happen. And although it is tempting to buy travel insurance almost as an after-thought and choose the cheapest policy on offer, the events of the past week have shown that it can be worth paying a little bit more for peace of mind and better cover.

Malcom Tarling, a spokesman for the Association of British Insurers (ABI), says that when consumers are buying travel insurance they need to understand what they are covered for and how it fits in with other means of recompense. He warns that insurance is neither priced nor designed to be your first port of call in these circumstances.

Travellers should contact their airline or tour operator in the first instance – airlines have a duty of care to their passengers under European Union law if flights are delayed or cancelled. Where passengers are forced to wait overnight, the rules require airlines to provide both food and hotel accommodation.

But if you have incurred costs that may not be covered by the airline – for example, a pre-arranged visit on a holiday where the flight was cancelled – you may well be able to claim on your travel insurance. Having a more comprehensive policy will reassure you and unusual events are far more likely to be covered, and better covered, under these policies.

It might sound obvious, but when it comes to travel insurance you really do get what you pay for, says Steve Williams, head of travel at Confused.com. A £5 policy is unlikely to have the kind of complete cover that will pay out thousands of pounds so those looking for a more comprehensive policy should generally expect to pay more for their insurance.

In general, recognisable brands such as M&S and Saga tend to have pretty strong levels of cover, says Williams. He adds that Swift Cover, although you might associate it with cheap policies, tends to offer good value for money in terms of what is covered in the policy.

You can also tell quite a lot about a policy by looking at the level of cover for each category. The Foreign & Commonwealth Office has recommendations about what your travel policy ought to cover, although it gives no specific amounts.

Williams reckons that a policy should cover at least £3,000 of cancellation expenses, £2,000 of baggage insurance and £2m of medical cover as well as potentially having protection for cash and your passport.

But pay attention to these details. If you are going on a £5,000 holiday, having travel insurance that will cover cancellation on holidays worth up to £3,000 won’t be much use. Equally, if you are taking expensive belongings, check the limits on single items.

For example, M&S premier travel insurance has a single item limit of £300, which is about average for a premier policy. Its standard policy only covers single items up to a value of £150 each. A good digital camera would easily exceed this.

Williams recommends making a list of about five things that you feel are important to have cover on and then narrow down the policies accordingly.

In the wake of the disruption caused over the past week, people now have much more interest in the detail of their policies.

It is worth spending some time checking exactly what you are covered for – you have 14 days to cancel after purchase – and work out what features are most important to you and how well they are covered.

It probably won’t be a volcano that derails your next holiday, but it’s worth being prepared for unprecedented events.