During the recent travel disaster caused by the Iceland volcano, a plethora of insurance articles popped up with one main question at the forefront: Were people whose travel plans impacted negatively by the disaster covered by travel insurance? Or was this an "act of God" that no one could foresee (or price for) and thus not a covered event?
The answer to that question is worthy of yet another post (by me) regarding travel insurance. Naturally the answer is a 'sort of yes, sort of no' type answer but seeing why is half the fun!
First off, I am not a huge fan of travel insurance overall. I have stated on more than one occasion that most trips do not entail such risks that the added expense of insurance is a worth while expense. There are exceptions of course - traveling in summer where snow storms would not occur (which tend to disrupt air travel the most) would lead one to pass on insurance for the most part. Unless you had an expanded and somewhat complicated month long trip with numerous connections in foreign lands, in which case peace of mind protecting you from health disasters as well as travel disruptions might warrant a policy or two.
Such was the case in April. In our hotel, we have at least 4-5 sets of guests that not only ended having to stay an extra 4-8 nights in a hotel, they had to pay to rebook at higher rates in order to move 'up' on the list of departees ASAP(as soon as possible). Hotels in Australia were reported to have doubled or tripled the normal rate within hours of the disaster occurring so not only did some people have to delay their departures, they had to pay some $300 per night for the joy of not being able to get home. Airport hotels in Europe were reported doing the same.
Would they have been covered? According to the New York Times blog post I found, the answer is yes - if they bought the comprehensive insurance. Comprehensive insurance is expensive - up to 8% of your trip values, which means 2 overseas tickets and 2 weeks worth of hotel protection might cost some $800 extra! When so many people spend so much time looking for the cheapest airfares available for trips, the idea of spending another near thousand bucks for 'insurance' is usually not even an option.
But for those who were stranded and were paying upwards of $100-150 per night for food and lodging (much less $300 per night), they would have paid MORE than the insurance cost within 5 days even if they could still use their tickets without an increase in fare.
The post on the blog is well worth reading. It may change your mind about insurance in the future - at least for those trips where some (any) disaster (from terrorism to Mother Nature to missing your flight) causes you added and unexpected and often times prohibitive expense.