Chartis, an Australian leader in general insurance, has clarified its position in regards to future flight cancellations due to Volcanic Ash.
Earlier statements released from Chartis communicated the company’s position in relation to the
ongoing disruption of travel arising from Icelandic volcanic activity, claims arising from these
disruptions are generally covered if the insurance cover was already in place prior to the
eruption that occurred on the 16th April 2010. In fact, Chartis’ Australian branch expects to pay
almost $2,000,000 in claims to Australian travelers in connection with the April 16 eruption.
Chartis would now like to clarify their position in relation to insurance cover that commenced
after 16th, April 2010.
Whilst the Eyjafjallajökull volcano continues to erupt in Iceland, travel disruptions have become
sporadic with many scheduled air services operating normally for extended periods of time. For
this reason, Chartis has taken the view that future travel disruptions caused by the volcanic
eruption will, in most cases, be unforeseen or unexpected, and would generally be covered
subject to the other terms, conditions and exclusions of the policy.
However, if an individual purchased travel insurance* and was aware of the likelihood of
disruption to travel at the time of the purchase, then Chartis is unlikely to pay the individuals
claim. For example, if an individual purchased an insurance policy shortly before their planned
travel date and after an announcement of imminent airspace closures had been publicised, their
claim may be denied on the basis that the closure was either expected or foreseeable.
Some of Chartis’ policy wordings contain an exclusion stating that Chartis will not pay for any
losses arising out of any prohibition by, or regulation, or intervention of any government. Chartis would like to clarify that it will not be relying on this exclusion to deny any claims arising out of
airspace closures as a result of the volcanic eruption.
“Chartis is committed to providing our customers with protection from unforeseen and
unexpected events. The great news is that Chartis does not view the sporadic flight disruptions
due to volcanic ash as one event nor a pre-existing condition. We will consider claims
irrespective of government intervention or regulations“ commented Regional (Australia, New
Zealand and Papua New Guinea) Travel Product Manager, Mark Kopec.
“However, if you buy or activate an insurance policy after an unforeseen or unexpected event occurs, you are undermining the whole purpose of an insurance policy. Claims in such circumstances may not be paid. ” added Mr. Kopec.
Chartis’ Australian branch has paid almost $AU500,000 in claims to date to hundreds of Australian travelers in relation to the Iceland eruption. Over 80% of these were paid within 48 hours of determination and settlement. In addition to the claims paid, Chartis expects to pay at least two or even three times that amount in claims.
Chartis underwrites Travel Insurance products for household brands such as Jetstar, nab, ANZ, Tiger Airways and Diners Club.
* For credit card complimentary insurances and annual multi-trip travel policies (including
Corporate Travel policies), the date an individual purchased travel insurance is generally
deemed to be the date they activated cover for that trip by purchasing the travel