Volcano Raises Profile Of Travel Insurance Industry [The Hartford Courant, Conn.]

Apr. 21--Iceland's smoking volcano and the ash-laden skies of Europe may become the travel insurance industry's best endorsement.

"This is going to help our sales; people will remember this," said Valeri French, owner of French's Worldwide Travel in Newington.

Many travelers who planned to fly across the Atlantic this week saw their plans go up in ash with the eruption of Eyjafjallajokull, a volcano in Iceland. Many others are stuck abroad, paying for extra meals and nights in a hotel. If they bought travel insurance that covers trip delays, cancellations and unforeseen events, such as a belching volcano, those travelers will be fully or partially reimbursed.

Within the insurance industry, travel coverage is a tiny piece. Americans spent $1.6 billion on travel insurance, compared with $578 billion on life insurance premiums in 2008. Roughly three in 10 travelers buy coverage for their trip, and many of them have been calling in to file claims this week.

"Our call volume is up 300 percent," said Judith Sutton, director of product management at Travel Insured International of East Hartford, a major seller of travel insurance in the U.S.

The calls have been a mix.

Some are from people stuck in Europe. Others are from people in the U.S. who had planned to fly across the Atlantic this week, which is spring break for some schools in Connecticut. The rest are from people scared by the volcano and inquiring about coverage for future trips.

"This is my first volcano," said Paul Largay, owner of Largay Travel in Waterbury.

He has spent the past week fielding calls from clients who want to know when flights to Europe will resume.

"This week, I've had to operate more like a fortuneteller than a travel agent," said Largay, a 30-year veteran of the travel industry. "There's no precedent for this. No one knows what could happen. We get hourly updates from the carriers, but 100 years ago this volcano erupted for two months.

"It's mostly business travelers right now. We are thankful that this didn't happen during the real heavy peak leisure travel to Europe that starts in May."

Customers marooned in Europe should be able to fly out fairly soon -- if they bought travel insurance, Largay said.

"With travel insurance," he said, "they have ombudsmen and lobbyists who work on your behalf. If your flight is canceled, you are better situated to get a flight faster than someone without travel insurance. I told a client the other day this situation is like a kidney stone: It's painful, but it will pass."

French, the travel agent in Newington, doesn't like to let clients leave the country without travel insurance.

"We typically do not recommend that people go out of the country without travel insurance," she said. "People are always thinking they're going no matter what and they don't buy insurance. Young people in particular are very reluctant to buy it."

Some insured clients scheduled to visit Europe opted to go elsewhere.

"We've been able to get them alternate vacations," French said. "They're insured fully. They'll be reimbursed for their trip. We insure our home, our cars -- in this case, you're insuring a trip, something that could cost thousands of dollars."

It's protection for all manner of unpredictable events, such as outbreaks of swine flu or SARS or a terrorist attack.

"Who would have ever thought that a volcano in Iceland would have shut down flight service for this amount of days?" asked Carol Mueller, a spokeswoman for Travel Guard of Stevens Point, Wis., which covers 8 million U.S. travelers each year.

What you pay for travel insurance is based on your age and the price of the trip. It works out to be about 4 to 8 percent of the cost of the trip, depending on how much coverage you buy.

Martyne Manning, an Avon business owner, didn't purchase travel insurance. But her scheduled trip to London was more business than pleasure, and didn't involve a sightseeing package or an extended visit.

"My business partner and I had a meeting with the U.S. Embassy in London scheduled for today," Manning, the owner of Deepwater Seafood in Avon, a fresh fish market, said Tuesday. "We've been waiting for this appointment for six months, actually. We have to have a meeting with them every two years to renew our visa."

Manning's flight was booked on British Airways for 10:55 p.m. on Sunday from Newark, N.J., to London. But British Airways didn't announce that the flight was canceled until late Saturday night.

"Hopefully, we won't lose any money on this. I had a hotel reservation in London and they were understanding," Manning said.

"The most annoying thing has been the lack of information on the British Airways website and Expedia website -- I booked through them.

"I'm trying to get a refund, but Expedia hasn't credited my account. I need to book another flight tonight to let the embassy know when we can reschedule."

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