travel insurance industry paying out millions
Volcanic ash costing travel insurance industry millions of dollars in claims
The travel insurance industry is paying millions of dollars in claims to travellers stranded in Europe and elsewhere by the drifting Icelandic volcanic ash.
A New York Times report said industry officials are treating it as a weather-related event in their policies. Companies have typically covered non-refundable prepaid travel that pay stranded passengers US$150 (S$207 ) to US$250 a day for a maximum of US$1,500.
About 30 per cent of American travellers buy a range of insurance policies that cover cruises, flights and delays or cancellations caused by inclement weather and natural disasters like earthquakes.
According to NYT, about US$1.6 billion is paid in premiums every year in travel insurance, but figures for loss exposure are harder to come by in an industry that guards its losses.
Mr Barry Bistreich, principal insurance examiner for the New York State Insurance Department, said it was still too early to tell the scope of the claims and how they were being settled as travellers grapple with logistics. But he expected policies to be settled unless there were specific exclusions.
Insurance companies said their call centers had been inundated with travellers wanting help.
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