Britain's biggest insurer imposes 'ash tax' on travellers

Britain's biggest insurer is to impose an 'ash tax' on travellers who fear their holidays may be cancelled.



Just a week before thousands of families jet off on breaks during the school half-term, Aviva has become the first firm to impose the levy.



Other big insurance companies are set to follow suit.



Passengers queue at Heathrow's Terminal 5 this week as volcanic ash continues to cause disruptions. Aviva has imposed an 'ash levy' on passengers who fear their holidays may be at risk

The new add-on policy could cost a typical family an extra £40.



More than 150,000 Britons were stranded overseas in April after UK and many European airports were closed for six consecutive days following eruptions from a volcano in Iceland and the dense plume of ash cloud that spread as a result.



Many travellers incurred additional accommodation and transport bills totalling thousands of pounds, but they returned home to find that insurers and airlines refused to pay back costs.

Rochelle Turner, head of research for Which? Travel, said: 'Travel insurers have not come out of this situation very well, people feel let down by them. From now on travellers that want an assurance that their holiday will be protected from the disruption are going to have to pay extra for that.'



After the first closure of airports a handful offered to make a goodwill gesture to stranded travellers. Many have since made a u-turn on this policy.



Anyone who has booked a holiday since April 15 has been told they will definitely not be be able to claim for delays or cancellations. This is because insurers now deem the ash cloud a 'known event'.



As a result travellers book holidays at their own risk. And from July 1 Aviva has said it will not make any more goodwill payments to travellers.



Continuing threat: Iceland's Eyjafjallajokull is again threatening to cause havoc for holidaymakers

Earlier this week airports across Britain were closed again as the volcanic ash cloud once again encroached on airspace.



Lee Griffin, business development director at financial website GoCompare.com, said: 'Consumers may consider the extra cost to be a bit of an ash tax on this year’s holiday which is well worth paying for the extra peace of mind it brings.



'Travel insurers have been reviewing their wordings and others may well join Aviva in bringing out similar add on policies to cater for this unusual situation.'



The Aviva policy was revealed just 24 hours after new rules proposed tougher tests on whether flights could be grounded by ash.



The insurance, which is valid from June 1, costs £5 extra per person on a single trip policy, and £10 per person for an annual trip policy.



It will pay out up to £5,000 per person for travel and accommodation if a trip is cancelled because an airport is closed for 24 hours from the time of departure.



Those stranded overseas will be able to claim up to £100 a day for a hotel room and expenses - up to a total of £1,500. Or they can claim £1,000 for additional travel expenses.

Aviva travel manager Jerry Finch said: 'The risk of air space closure due to volcanic ash continues to loom large, and may be a risk faced by travellers for the foreseeable future.

'However, this was an event that most travel insurers did not cover – and therefore was never factored into the travel insurance premium.



'Aviva took the proactive decision to offer cover for both customers going on holiday or travelling home. We worked hard to develop this cover quickly to provide specific cover for what was previously an uninsured event.

'This is in direct response to what our customers and the public said they wanted: reasonably priced cover that would allow them to make travel arrangements full in the knowledge that should they get stuck abroad, or find that they could not leave the UK, there would be a clear and easy route to compensation.'



A spokesman for Aviva added: 'People can buy add on cover for golf equipment, or for other sports, now we are offering them cover for the ash cloud. You might not want it if you are just going on holiday in the UK or somewhere by ferry but definitely if you are flying you might think it was something that is useful if they were flying and were worried their holiday might be disrupted.'



