Insurer pulls plug on delay payouts

Getting travel insurance to cover flight delays might become more difficult as holidaymakers face the possibility of a summer of discontent with more air-traffic controllers' strikes on the cards.

At least one travel insurance company this week suspended sales of policies with clauses offering passengers compensation for flight delays because it fears a repetition of last week's strike by European air-traffic controllers protesting about plans to operate a single European sky policy.

Columbus Direct said it had withdrawn its delay payment clause from new business 'for the time being'. Marketing manager Paul Dittmer said the strikes, which forced British Airways on Wednesday to scale back its 126 flights to France to just four, were 'extremely likely to happen again'. He added: 'It is because we are going to get a lot of claims from people who are caught at the moment so we can't take on a lot of risk.'

Columbus had two levels of compensation for customers caught by flight delays. One policy gives out £10 after 12 hours and an additional £10 for every 12-hour block to a maximum of £100. A more expensive policy gives payments of £25 after the first 12 hours, then decreases to £10 for every subsequent block of 12 hours to a maximum payment of £105. Only delays caused by terrorism and acts of war were excluded from the clauses, which are still valid for customers who have already purchased their insurance.

Dittmer said the clause was one involving a 'very frequent payout' which is why the amount of compensation offered has decreased considerably over the years.

The Association of British Insurers said: 'People should shop around, bearing in mind the level of cover they want.'

Both Direct Line and Thomas Cook said they had no plans to reduce their cover giving delay compensation. Thomas Cook's insurance makes a £25 payment after a 10-hour delay with the option to abandon the holiday or get reimbursed on a pro-rata basis for any days missed. However, a spokesman said the clause was only valid if 'at the time of booking you are not aware of any strikes'.

The Association of British Travel Agents (Abta) said that although passengers might not be covered under their own insurance in the event of a delay, they can in some situations get compensation from their tour operator. 'If the airline has a technical fault and it is the tour operator's responsibility, you can claim from them as well. There are similar levels of compensation,' said a spokesman.