Volcano-proof travel insurance

[TW]Fox · 19 Apr 2010 at 23:15

JC said:
If you need to claim in September because all flights are affected, everyone will be claiming - how can they insure against that?

Thats how insurance works - its about risk. It's a gamble. The chances of there being no claims in September for this issue are higher than the chances of there being claims. Therefore, they offer the service.

dowie · 19 Apr 2010 at 23:16

xen_ said:
Get seperate volcano insurance.

Peter Griffin wasn't so dumb after all...

JC · 19 Apr 2010 at 23:26

[TW]Fox;16396060 said:
Thats how insurance works - its about risk. It's a gamble. The chances of there being no claims in September for this issue are higher than the chances of there being claims. Therefore, they offer the service.

The private insurance market does not work on a gamble, neither will they pay out from the "millions" they make from holiday/airline insurance. I thought you studied economics?

Insurance markets will fail unless:
Probabilities are less than one
Probabilities are known or estimable
Probabilities are independent

The_Abyss · 19 Apr 2010 at 23:28

[TW]Fox;16396060 said:
Thats how insurance works - its about risk. It's a gamble. The chances of there being no claims in September for this issue are higher than the chances of there being claims. Therefore, they offer the service.

For insurance to function properly there has to be a) an insurable risk and b) a market / appetite for that risk. There's no obligation to offer insurance for this sort of event.

[TW]Fox · 19 Apr 2010 at 23:30

The probability of a future eruption causing this sort of disruption in September is less than one.
The probability of this happening is estimable.

Some travel insurers ARE covering this current event.

[TW]Fox · 19 Apr 2010 at 23:31

The_Abyss said:
There's no obligation to offer insurance for this sort of event.

Hence me asking for recommendations for insurers who DO offer insurance this for this sort of event.

Jokester · 19 Apr 2010 at 23:31

Looking at my insurance there is a clause saying that they won't pay out if the flight delay is due to CAA etc edicts stopping flights.

If they don't pay out, I'll be cancelling my policy with them.

JC · 19 Apr 2010 at 23:34

[TW]Fox;16396178 said:
The probability of a future eruption causing this sort of disruption in September is less than one.
The probability of this happening is estimable.

Some travel insurers ARE covering this current event.

I'm not going to get into a long drawn out argument with you, but you have neglected point 3 which is not optional. The private insurance market will not offer anything of the sort without regulation or subsidies.

Edit for clarification: If any insurers are paying out right now it is for publicity/goodwill reasons.

My point is I do not believe you will find any insurers explicitly covering future volcanic ash flight restrictions in September.

[TW]Fox · 19 Apr 2010 at 23:38

JC said:
I'm not going to get into a long drawn out argument with you, but you have neglected point 3 which is not optional. The private insurance market will not offer anything of the sort without regulation or subsidies.

Please explain why many travel insurers are currently paying out for disruption caused by the ash cloud.

You appear to be making the point that no insurer would ever pay out for this. Yet.. there is empirical evidence to suggest you are wrong.

The_Abyss · 19 Apr 2010 at 23:39

[TW]Fox;16396185 said:
Some travel insurers ARE covering this current event.

[TW]Fox;16396185 said:
Hence me asking for recommendations for insurers who DO offer insurance this for this sort of event.

There you go. Ask Fox - he'll tell you.

[TW]Fox · 19 Apr 2010 at 23:41

The_Abyss said:
There you go. Ask Fox - he'll tell you.

I don't know which ones are and which ones are not, hence the thread :rolleyes:

There was also the second question - if the airline cancels your flight, do they have to offer you a refund? If they do, and you've not commenced your trip, then insurance isn't required to solve the problem anyway.

The_Abyss · 19 Apr 2010 at 23:43

[TW]Fox;16396234 said:
Please explain why many travel insurers are currently paying out for disruption caused by the ash cloud.

You appear to be making the point that no insurer would ever pay out for this. Yet.. there is empirical evidence to suggest you are wrong.

They may not be obliged to pay out, but have chosen to do so (cheaper than handling the complaints, great PR etc). That doesn't mean that they'll underwrite any further policies for the same risk from now on.

A few years back, when there was a big batch of contaminated petrol buggering up engines everywhere, LV= worked out that they didn't have to honour claims, but instead chose to (they're a mutual - easier when your shareholders are also customers) accept any claims relating to the incidents. Of course, they claimed back from the retailer but in the meantime they gained a huge amount of goodwill and future business from their actions, and although it was only around 1,200 policy holders, they got huge coverage from it.

Who are you going to buy your next insurance from - the ones that paid your claim or the ones that rejected it...

The_Abyss · 19 Apr 2010 at 23:44

[TW]Fox;16396254 said:
I don't know which ones are and which ones are not, hence the thread

There was also the second question - if the airline cancels your flight, do they have to offer you a refund? If they do, and you've not commenced your trip, then insurance isn't required to solve the problem anyway.

No, they don't. They can offer an alternative, depending on the origin or destination.

Jokester · 19 Apr 2010 at 23:45

JC is right, from now on as long as this eruption continues new policies will exclude any further disruption caused by it.

[TW]Fox · 19 Apr 2010 at 23:47

The_Abyss said:
No, they don't. They can offer an alternative, depending on the origin or destination.

Is there some sort of reasonableness clause in this?

Obviously if you've got 2 weeks of leave booked a flight to, say, New York 7 days after you intended to travel is of no real use to you.

JC · 19 Apr 2010 at 23:49

[TW]Fox;16396234 said:
Please explain why many travel insurers are currently paying out for disruption caused by the ash cloud.

You appear to be making the point that no insurer would ever pay out for this. Yet.. there is empirical evidence to suggest you are wrong.

We appear to be crossing posts as I have said above I believe any payouts are for PR/goodwill/advertising and its mainly by airlines not insurers as such.

Quick googling: Source: www.thisismoney.co.uk

When flights are cancelled within 14 days of travel, airlines are required to compensate customers. There is also compensation available for delayed flights. This comes under EU rules.

However, airlines are not required to pay compensation for disruptions caused by extraordinary circumstances that are beyond their control. In practice, this has included extreme weather conditions and it seems likely the volcanic cloud will not be covered by compensation rules.

However, many airlines say they will compensate customers who find themselves out of pocket, refunding flights or offering alternatives. British Airways, bmi and easyJet are offering customers a choice of a refund or a free transfer on to another flight when air services resume.

[TW]Fox · 19 Apr 2010 at 23:51

Sounds encouraging. I simply wish to avoid the situation whereby I have neither the flight I wanted nor the £1000 paid for the tickets to fly on it. I'm not entirely sure this is a particularly unreasonable request - unlike most others I do not beleive it reasonable to expect the airlines to be funding peoples hotel accomodation etc etc. I have a lot of sympathy for people like Easyjet who are finding themselves paying hundreds of pounds to accomodate customers who paid 30 quid for a flight.

Just a refund or the ability to rebook the flight for a more convenient time is the peace of mind I require to make the booking.

Jokester · 19 Apr 2010 at 23:51

Certainly United Airlines are just rescheduling us onto the next free flight for no cost.

Creelers · 19 Apr 2010 at 23:55

I came in here to say:

Who's laughing at Peter Griffen's volcano insurance now?

But I was beaten to it!

The_Abyss · 19 Apr 2010 at 23:57

[TW]Fox;16396292 said:
Obviously if you've got 2 weeks of leave booked a flight to, say, New York 7 days after you intended to travel is of no real use to you.

Airlines only care (if they care at all) about the flight. They do not give a stuff about what plans you may have made when you've got there, and the law is pretty much on their side to agree with them.