It appeared as though the dust had (quite literally) begun to settle after the nightmare that was the Eyjafjallajökull ash cloud. Most travel insurers agreed that volcanic eruptions were not considered weather phenomena and, as such, refused cover for losses suffered as a result of any disrupted travel plans. They instead advised their customers to contact their airlines to enquire as to their entitlement for compensation under the Denied Boarding Regulations.
However, the status quo may change following a decision made by a district judge at Yeovil County Court in the matter of Tucker v InsureandGo (unreported). Mr Tucker was stranded abroad in Mexico as a result of his flight home being cancelled. As a consequence of his predicament, he incurred a number of expenses, which he sought recompense for under his travel insurance policy.
The insurers declined to pay his claim on the grounds that the ash cloud was not a weather-related issue. Mr Tucker decided to take matters further, issuing legal proceedings against his insurers. The presiding judge concluded that, for the purposes of interpreting the policy terms, the ash cloud should be considered 'weather-related' and found in favour of Mr Tucker, ordering his insurer to pay £1,009 in satisfaction of the claim.
This is a Small Claims Track judgment and is not therefore binding on future cases. However, what is concerning for travel insurers is that the decision comes hot on the heels of a provisional decision by the Financial Ombudsman Service (FOS) regarding a similar issue, which again resulted in a similar conclusion.
The FOS is still handling numerous complaints against insurers for non-payment of ash-cloud related claims, and the county court decision may therefore be cited as a guiding decision. Disgruntled policyholders will gain encouragement from the decision and this might result in more claims running through the courts. As the limitation period for such claims runs for six years, the issue could remain in the spotlight for some time to come. A test case from the FOS in the High Court might be a sensible way to resolve the issue once and for all, but, for the time being at least, the Ombudsman appears to have no appetite for such action.
We shall keep abreast of developments and will report further as things develop.