Volcano fears spark travel insurance inquiries

Holidaymakers hoping for a trouble-free trip may yet find their travels disrupted by further Icelandic volcano activity this summer, according to volcanologists. Magnús Tumi Gudmundsson, professor of geophysics at the University of Iceland, said: "The previous activity lasted for 14 months with long spells of inactivity, so on the basis of the history of this volcano we are not convinced that the current activity is over." Any new eruption could boost demand for "volcano insurance", following a surge in demand after Eyjafjallajökull erupted in April, leading to air travel disruption across Europe. This led to huge interest and increased sales of travel insurance add-ons to cover airspace closure, according to figures from Aviva and web research company Greenlight. The number of people searching on Google for "volcano insurance" increased from 58 searches in March (were they volcanologists who knew what was coming?) to 9,900 in April – an increase of 17,000% – while "travel insurance compare" increased, month-on-month, from 18,100 searches in March to 33,100 in May. As a result some websites attracted a huge number of clients during April.Moneysupermarket.com benefited most, with a surge in travel insurance-related traffic of 27% from 15-20 April. By contrast, searches for home insurance products dropped from 1.3m to 476,000. In May Aviva, the UK's largest insurer, announced the launch of an optional add-on to its standard travel insurance policy, offering extra protection should customers' holiday travel be affected by UK airspace, port or airport closure. Aviva's Sally Leeman said that since they began offering the added cover 83% of existing customers who have called the group about the product have gone through with the purchase, though the insurer could not give a figure for how many actual added policies were sold. Aviva's standard cover offers £25 a person for every full 12-hour period of delay up to £250 between the scheduled departure of the original flight and the eventual departure time. The add-on raises this to £100 a person for every 24 hours that the policyholder is unable to return home (to a maximum of £1,500), irrespective of any help given by the travel provider or airline. A second option offers up to £1,000 a person for any "necessary and reasonable" travel expenses where after 24 hours you unavoidably have to make immediate alternative arrangements to get home, which your holiday provider cannot arrange. It will also pay for emergency medical supplies required to prevent a deterioration or exacerbation of an existing condition. 

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