Insurers and brokers ponder legal ruling on travel compensation

Insurers were today pondering the significance of a legal ruling on travel compensation that could affect travel insurance policies.

This week, a Stoke-on-Trent County Court judge awarded a former teacher and his wife £680 after their flight home from Tenerife with Thomas Cook was delayed by 22 hours.

It is the first time a judge has implemented the October 2012 Court of Justice ruling according to which airlines have to compensate passengers for delays for which they are responsible, such as problems with the crew or technical issues. Airlines, though, cannot be held accountable for delays caused by adverse weather.

The decision means that customers, and potentially insurers, can claim for compensation for delays of more than three hours dating as far back as 2005. It may also mean that insurers will have to review how much they are offering for delay cover, which can be as low as £20, and determine whether the amount should be increased in light of the ruling.

Finally, the ruling could make it easier for insurers to claim back from airlines when the latter are to blame for delays.

Although it is still at a early stage, Insurance Times understands AXA, one of the top travel insurers by market share, is considering the implications of the judgment. Brokers are also looking at the ruling, wondering what it will mean in terms of offering advice to customers.