Ash-cloud claims and compensation

Even if the "force majeure" or "Act of God" get-out doesn't apply, most policies sold after mid-April are unlikely to reimburse you for unforeseen costs.

Using another clause in the small print relating to "known events", insurers are saying the ash cloud is a risk holidaymakers are now aware of before they buy a policy. Claims arising from it, they say, won't therefore be viable.

If you bought a policy, or renewed an existing policy, before April 15, you're in a stronger position when it comes to compensation, but your holiday also needs to have been booked by this date for claims to have a chance of success.

Big insurers such as HSBC and First Direct say they are currently paying out for accommodation and repatriation costs as a gesture of goodwill and will continue to do so if the ash causes more problems, but only for customers who bought and booked before the mid-April cut-off. Other companies have adopted more or less the same stance.

Direct Travel Insurance is one of the few insurers I found that says it will continue to honour claims on policies bought after April 15.

"We will treat volcanic ash clouds as 'weather related' and we will not invoke any exclusion relating to 'closure of airspace by the CAA'," says a Direct Travel spokesman.

An exception is if there's clear evidence that travel plans are likely to be affected – for example, if Spanish airports are closed on the day you buy a policy and you're going on holiday to Spain the following day.

Another specialist insurer, Columbus Direct, says it will continue to provide cover for customers buying enhanced policies if their trip is delayed more than 12 hours due to volcanic ash. It will also reimburse for "abandonment" on delays of more than 24 hours. The company is currently introducing optional add-on cover for "unforeseen circumstances preventing return home as pre-booked".

The situation is complicated because if you're flying with an EU airline, your accommodation costs should be covered in the event of delay or cancellation, regardless of insurance. The key advice is to ask your insurer exactly where you stand should the ash problem continue.