Squaremouth in the News

ITIJ, Feb 3 2020 – Does the eruption of the White Island volcano spell the end for ‘volcano tourism’?

ITIJ, Feb 3 2020 – Does the eruption of the White Island volcano spell the end for ‘volcano tourism’?

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Despite recent events, World Nomads spokesperson Phil Sylvester does not believe volcano tourism is likely to become an uninsurable hazard. “We discussed this in the immediate aftermath of the White Island tragedy,” he says. “We came to the conclusion that we have sufficient safeguards in place from a risk point of view, considering licensing of operators, warning and alert systems and, ultimately, the obligation on insureds to not take ‘unnecessary risk’.”

Sylvester draws comparisons with other activities that may appear hazardous, but are in reality low risk. “Consider bungee jumping, which was also popularised in New Zealand,” he says. “If you tied a bunch of elastic bands to your legs and jumped off the roof of your hotel, I can confidently predict no insurer would entertain a claim. But if an insured with appropriate cover turns up at a provider who has passed safety audits and consequently holds a license to operate, follows all their safety procedures, takes directions from their staff and doesn’t do anything stupid, it is highly unlikely that any harm will come to them, and if it does it would be ‘unforeseen’ and extraordinary.”

For those visitors to White Island, the criteria above seem to have been met. Sylvester said to ITIJ: “The operator was licensed, safety equipment was used, a trained guide accompanied all visitors [and] the eruption alert was below the level which would have precluded a visit.” He added: “Perhaps official inquiries will recommend that the criteria for future visits to volcanoes need to be tightened, which would seem prudent as any loss of life is truly terrible. If the threshold for volcano tours was lowered, our current test for extending cover would remain effective,” Sylvester confirmed.

The reputation of travel insurers could be damaged, he added, if the industry were to take a more draconian approach to such cover: “The public already eyes the product disclosure statement (PDS) and policy wording with suspicion. While adding clauses may help insurers manage risk, it is very likely to add to ambiguity and confusion for the end user. It is important for insurers to strike a balance between managing risk and providing a great customer experience.”

Kasara Barto, Public Relations Manager at US-based travel insurance comparison website Squaremouth, agreed that a measured approach is appropriate: “It would be unlikely that insurers would exclude coverage for dormant volcanoes outright,” she said. “However, once an event occurs, or becomes known or expected, providers will no longer offer coverage for that event on any policies purchased after that date. [So] while insurers probably won’t exclude dormant volcanoes specifically, they can stop providing coverage for losses related to a volcanic eruption once it becomes ‘foreseen’.”

The general exclusion in travel insurance policies around the world for foreseen events, noted Barto, can be applied to a volcanic eruption. “An example of this wording is: ‘any issue or event that was not anticipated or expected and occurs after the effective date of coverage’.”

Read the full ITIJ article online here: https://www.itij.com/latest/long-read/does-eruption-white-island-volcano-spell-end-volcano-tourism