Bali volcanic ash cloud flight delays: will my travel insurance cover me?

Have you been delayed in Bali by the eruption of Mount Raung​ that has caused flight cancellations and left many thousands of travellers stranded? And expecting your travel insurer to cover you for extra hotel nights, meals and whatever other expenses you might have incurred? Be prepared – you may be in for a nasty surprise. So, will the insurance cover you?

"The answer is yes … or, as is often the case with travel insurance, maybe," according to Natalie Ball, associate director of Compare Travel Insurance.  "The type of policy, the choice of insurer and the date you purchased your policy will determine whether you're covered."

Travellers can expect to claim for additional expenses resulting from flight delays caused by the ash cloud only if they've purchased a comprehensive policy. 

"A basic travel insurance policy does not generally provide cover for travel delays or cancellation and they're priced accordingly," says Ball. "However, many standard or comprehensive policies do provide cancellation cover and additional travel expenses incurred as a result of natural disasters."

The other factor that will affect your claim is the date when you purchased the policy. The ash cloud from Mount Raung first appeared on June 29. By July 2 or 3, major insurance underwriters such as Allianz and Lloyds of London applied a cut-off date. Travel insurance is there to provide cover against unforeseen events.  Since the ash cloud was in the sky and could affect flights which might lead to insurance claims, flight delays were no longer deemed to be an unforseen event. Policies purchased after that date would no longer provide cover for such claims. It's like calling an insurer and asking for cover for your house as the smoke from the bushfire is blackening the sky. 

Further, according to Ball, if you purchased travel insurance to cover a trip to Bali after the cut-off date, your insurer would not necessarily inform you that any subsequent claim for extra expenses caused by the Bali ash cloud would be ineligible. It's up to you to check the fine print. "In short," says Ball, "Don't set off for Bali in the next couple of days and expect insurance to cover against the ash cloud, as it is now a well-known risk."

Finally, Ball notes that according to estimates by 1Cover Travel Insurance, some 30 per cent of the 16,000 Australians who travel to Bali each week have no travel insurance. "If you haven't bought travel insurance we strongly advise you to do so in the future. As we always say at Compare Travel Insurance, if you can't afford travel insurance, you can't afford to travel."

If you are in Bali and your travels have been affected by the ash cloud:

Contact your airline and find out whether they will provide accommodation until flights resume. If not, get it in writing if you intend lodging a claim to cover additional accommodation costs.

Contact your insurer before you incur any additional hotel or other travel costs and find out what you're covered for and how much. 

Get everything in writing. Proof that your flight has been delayed is vital to any claim. 

Keep all receipts, you'll need proof of payment to substantiate your claim. "Travellers should remember that it's not a means of making a profit," says Ball. If you decide your delayed flight warrants a few nights in a villa at the Four Seasons, disappointment will likely follow.