How does travel insurance work when there is a natural disaster?
In just the last few months tens of thousands of Australians have been stranded in Bali due to volcanic ash clouds. All airlines were forced to ground their planes and then scramble to reseat passengers when the skies cleared. Some passengers were stranded for up to a week – and that’s always going to cost money. With normal flight cancellations the airline is responsible for passengers’ expenses, but what about situations like this one where it’s not their fault? This is where your travel insurance policy steps in.
An incident like a volcanic eruption (or a flood, fire, cyclone or earthquake) falls under the natural disaster or “act of God” clause that you’ll find in all insurance policies. Timing is key to being covered. No travel insurance policy will cover you if you purchase after a natural disaster becomes a ‘known event’, meaning that it is already underway. For example, if the volcano has already erupted and ash is affecting flights, you can’t purchase insurance the next day and claim for your cancelled holiday. The lesson here is to purchase travel insurance as soon as you book your holiday. Whenever you buy it you still only pay for the days you are travelling, but you’re also covered for cancellations before departure.
So you’ve planned ahead, booked your holiday, purchased travel insurance and the bags are packed. Then (natural) disaster strikes. While the specifics may vary, policies will generally reimburse you for unexpected costs if you’re flight is cancelled due to a natural disaster. This means if you are already on holiday and can’t get home, your accommodation, transport and reasonable living expenses are covered up to a set daily maximum. If you’re yet to depart, the policy should pay for the costs incurred in rescheduling your trip or the cancellation fee (generally whichever is lower).
If you are caught up in a natural disaster on the ground during your holiday, your insurer will cover the cost of you evacuating to a safer location. Note that this generally only applies if the government of that country has ordered a mandatory evacuation or your place of residence is uninhabitable.
As with all insurance policies, there are limits you need to be aware of. Your policy will only reimburse you for reasonable expenses incurred during a delay. If your limit is $50 per day for food, don’t try to claim that meal at a five-star restaurant. You also need to be sure that what is affecting your trip is actually classified as a natural disaster. Really bad weather might feel like a disaster, but it’s probably not going to meet the criteria.
A travel insurance policy for a one-week holiday somewhere like Bali will set you back as little as $50 and, while you might not be able to claim every penny you are out of pocket, you’ll certainly get back more than someone without any insurance at all. Be smart and get insurance – because you never know what’s around the corner.
The best holidays come from peace of mind – click here to arrange your travel insurance now.
Related Links:
The emergency health kit you should always travel with
10 mistakes we all make when travelling (and how to avoid them)
3 common travel illnesses (and how to avoid them)