FOS prepares for backlash over volcanic cloud insurance

A huge number of Brits have suffered extreme disruption over the past week after the erupting volcano from Iceland sent plumes of volcanic dust and debris into the air, which ultimately resulted in British airspace being closed down for a number of days. This meant that no flights could leave the UK or return to the UK, which left many people that were due to go on holiday stuck in the UK and many that were due to fly back stranded abroad.

Whilst the volcanic eruption did cause immense stress and disruption for passengers many were confident that although they had to fork out money to pay for food and accommodation, and in some cases to pay for alternative means of transport, they would be covered by the travel insurance policy that they took out.

However, according to reports many travel insurance firms are now using any loophole they can find to try and get out of making payments on claims from passengers, and this is causing fury amongst the many passengers that have lost out in one way or another. The Financial Ombudsman Service is said to be preparing for a mass influx of complaints from those that are expecting compensation from their insurance firms.

For those that were stranded abroad out of pocket expenses could run into thousands if the insurance firms do not pay up, and for those that booked holidays that they then could not take the losses could also be huge, and they will have paid out for a holiday that they could not take.

One stranded passenger said: ‘We feel helpless. At first, our insurer, Lloyds TSB, said it wouldn’t pay out, but now they say they will. It doesn’t fill you with much confidence. They say we can make reasonable expenses, but we have to guess what that means. If they suddenly decide something is not covered, then we will lose hundreds of pounds.’