NZ volcano claims top $500,000

Insurance claims from people whose travel plans were disrupted by the Iceland volcanic ash have topped half a million dollars, according to figures compiled by one of New Zealand's biggest travel insurance companies.

Southern Cross Travel Insurance says it has been inundated with about 200 claims from affected passengers, since the Icelandic volcano erupted last month.

Chief executive Craig Morrison expects that tally to double in coming weeks, and reach the highest number of claims since the 9/11 terrorist attacks.

Morrison said the expected figure was based on the number of calls the insurer received during the eruption.

Experience also suggested that it took time for people to file their claims, he said.

"The sheer volume of New Zealanders travelling to and from Europe on a daily basis, and the high costs involved with travel and accommodation in Europe, meant that the scale of the incident had significant insurance implications - considerably higher costs than last year's tsunami in Samoa."

About 40 claims, totalling less than $50,000 were filed following the tsunami.

Morrison said the claims this time around predominantly related to accommodation and food costs and about three quarters were from people who were delayed overseas, rather than those who were unable to leave New Zealand.

Future claims against disruption to travel from the Icelandic volcano would not be covered, he said.

Insurance Council of New Zealand chief executive Chris Ryan said people needed to check with their individual insurer to see if this applied to them.

Morrison said he had heard of one European insurer who was excluding claims because the company deemed the eruption an "act of God"

Ryan said it would be up to individual insurers to decide whether they classed the eruption as a "new event", given the volcano was a known risk that had the potential to disrupt air traffic.

A spokesperson for Mike Henry Travel Insurance said the company had received hundreds of calls to its helpline since the volcanic eruption, however it would be many months before the number and value of claims resulting from disrupted travel was known.

European budget airline Ryanair has submitted claims to both the Irish and UK governments for compensation for disruption to its flight schedule after the closure of airspace due to volcanic ash, but Air New Zealand says it has no such plans.

Aviation Industry Association of New Zealand chief executive Irene King estimated the country was losing between $1.5 million and $2 million a day from the disruption, with Air New Zealand bearing the brunt of the cost.

Air New Zealand earlier estimated the net cost of flight disruptions to its business at half a million dollars a day.