Insurers could be forced to pay out thousands of pounds in compensation after a customer recently won his case in a small claims court that the disruption caused by last year’s ash cloud, could be classed as ‘weather related’.
Hundreds of customers made claims following the disruption of their travel plans when the in Iceland erupted last April, but were under the impression that a volcanic eruption would be classed as a natural disaster, which is not covered under normal travel insurance policies. However, Clive Tucker, a former lawyer from Devon, took his insurance company to Yeovil County Court after they refused to pay up when he was stranded in Mexico due to the ash cloud. Insure and Go, underwritten by Europ Assistance told him that the disruption was not weather related. However, now having won his case they have been ordered to pay Mr Tucker £1,009 in compensation.
The Financial Ombudsman Service (FOS) is now in negotiations with other underwriters investigating claims by hundreds of travellers affected.
The FOS itself has received 600 complaints over the incident which saw flights grounded across Europe for over ten days from customers unhappy at their insurers decisions not to pay out, and is hoping to make a final ruling on them all soon. Consumer rights organisation Which? have predicted that if the FOS did rule in favour of the ash cloud being weather related, then it could lead to hundreds of more payouts to previously disgruntled passengers.
A Which? spokesperson announced “It’s time for insurers to stop mucking their customers about and pay up”, he added “Even if their policy terms and conditions meant they were not covered by a FOS ruling, the victory in the small claims court would encourage more to turn to their courts.”
Europ Assistance declined to comment saying that it would be inappropriate to speak out on an issue that was still being discussed by the FOS.
The Association of British Insurers admitted that as many insurance companies had taken different stands on the ash cloud issue it would make sense for the FOS to make a definitive ruling on the issue.