Travel claims hazy as insurers declare eruption act of God

ABOUT 20,000 Australians, whose travel plans have been thrown into chaos by the Iceland volcanic eruption, face confusion over their travel insurance.

The director of the multi-insurer travel insurance website Travel Insurance Australia, Walter De Angeli, said the big insurance providers such as QBE and Alliance were offering to cover all reasonable expenses such as accommodation, meals and cancellation fees incurred after European flights bans last week.

But some companies were deeming the event an ''unforseen act of God'' and refusing to cover some expenses.

''There's a nebulous dividing line and no one knows where it is marked,'' he said. ''For this [event], had they wanted to, the insurance companies could have pulled the ''act of God'' defence out of their bag of tricks but most have said they won't.''

A spokeswoman for the Insurance Council of Australia said insurance providers could use their discretion when determining claims from disasters such as the volcano and that ''no two policies are the same''.

The managing director of 1cover travel insurance, Eddie Feltham, said any claims on policies issued by 1cover before April 16 when the volcano erupted would be fully covered. Covermore said customers had to ''take all reasonable steps'' to minimise their claim.

Travel Insurance Direct promised to cover all expenses and the company's general manager, Ian Jackson, said there should be no distinction with regards to flights delayed ''due to these sort of natural disasters''.

The Travelscene American Express general manager, Jacqui Timmins, said many travellers had not fully acquainted themselves with their insurance policy and were now finding themselves without sufficient cover.

Despite 7 million travellers being stranded worldwide, airlines stood to lose more than insurers, Mr De Angeli predicted. Further confusion had arisen because most airlines were also offering to compensate stranded passengers.

Qantas is urging Australian passengers stranded in Asian transit hubs of Singapore, Bangkok and Hong Kong to accept the airline's offer of a free flight back to Australia, so they can restart their journey once European airspaces reopen.

About 800 Australians remain stuck mid-journey in Asia, most in Singapore. Initially, more than 1000 people were stuck in Singapore, but about half have returned home. Most of the 350 Australians in Bangkok and Hong Kong have flown back to Australia.

But Europeans stuck in Asian airports are being told it could be two weeks before they are able to fly home. At Suvarnabhumi Airport in Bangkok yesterday, thousands of stranded passengers were trying to rebook on the first available flight to Europe.

Granville and Angela Harris from Birmingham were told yesterday the first Thai Airways flight to Britain they could take was on May 4.

''I passed out, just fainted, from the sheer shock,'' Mrs Harris said.