Flybe launches ‘volcanic ash insurance’ to let travelers book with more confidence

Following the massive ash cloud disruption which led to the closure of the airspace over much of Europe for five days in April, as many as 150,000 British travelers were left stranded overseas and thousands more were forced to cancel their trips and remain in the UK. The Telegraph reports that in the past week package holidays bookings in the UK have increased 20 percent, and bookings made through high-street travel agents have risen by 12 percent. A major reason for this may be that during the disruption most stranded holidaymakers who booked a package holiday with a licensed tour operator were offered free accommodation and meals until flights resumed. Many independent travelers, however, were left to cover the cost for hotels, food, and transport home themselves.

In a move to restore confidence among travelers (for example, today flights in and out Ireland have been grounded again), UK low-cost carrier Flybe has just introduced a ‘volcanic ash insurance’, which it says is the first in the world. The GBP6.99 (EUR8, USD10.50) per person policy is underwritten by travel insurer Chartis and will reimburse passengers for costs for delays of more than 24 hours caused by closure of airspace. If passengers are stranded away from home, Flybe will pay for any reasonable unplanned-for costs incurred for additional accommodation and travel expenses up to GBP150 (EUR170, USD230) for each 24-hour period with a maximum of GBP1,050 (EUR1,200, USD1,600). The option to purchase the insurance is available with online bookings made between 28 April and May 10th 2010 for travel up to October 30, 2010.

Consumer watchdogs, however, state that passengers are already entitled to reimbursement from airlines under an EU regulation 261 in case of another volcanic eruption, and the British Insurance Brokers Association says more than half of travel insurance policies covered such disruption. Flybe in turn claims it is making no money from the ‘ash insurance’, and says it stands by its commitment to reimbursement as laid out in EU regulations, but “wants to make sure passengers have insurance to help pay for any additional costs” from airspace shutdowns.

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