Why you shouldn't skimp on travel insurance
If there's one lesson to be learnt from the latest flight disruptions out of Bali, that would be not to skimp on travel insurance.
Thousands of Australians continue to be stranded in Bali due to the volcanic ash cloud from Indonesia's Mount Raung.
Some travellers have managed to make it home, with Denpasar airport opening intermittently. However, there are reports suggesting it could be up to 10 days before most passengers can fly out.
If you don't have the right travel insurance, or none at all, this kind of disruption could leave you with a nasty unplanned dent in your bank account.
What does an "act of God" cover?
Insurance product disclosure statements (PDS) can be confusing at the best of times. Some policies still refer to natural disasters as an act of God, so if it's not clear what that includes, then ask.
"We always urge people to read the PDS before they purchase, and we suggest you have a re-read now, so you're very clear about our obligations to you and the types of things we do - and do not - cover," says Travel Insurance Direct (TID) Australia spokesperson Phil Sylvester.
"We don't use the term 'act of God' in TID policies. The volcanic ash cloud event is regarded as a 'natural disaster' by TID and it is covered. Like the other outdated term 'force majeure', it was open to interpretation. We decided it would be better for the customer and easier to understand if we just named the type of events we do or don't cover."
How much can you claim back?
"All good travel insurance will have coverage for cancellation, delay and out-of-pocket expenses," says Sylvester. "If the policy you're looking at doesn't, then shop around."
With potential delays of up to 10 days in Bali, accommodation is going to be a major unplanned cost.
Sylvester provides an example of what is covered if you had taken out the relevant policy with TID before July 2, 2015: "If you're stranded in Bali we will pay $200 a day towards the cost of accommodation.
"We will also pay $50 a day for reasonable living expenses - meals, etc - until such time as your airline gets you home, so it's important you keep receipts. If you were going on to some other destination and because you're unable to get there you lose the non-refundable deposit on pre-paid hotels, air tickets, tours, etc, you can claim for those too.
"If you're here at home and can't get to Bali for your holiday, we'll pay the reasonable costs of re-arranging your trip (or the cost of cancelling it altogether - whichever is the lesser amount). If you were going to Bali to attend a course, we'll cover the tuition fees.
"We'll cover travel agent's cancellation fees (up to 10% of the amount paid or $1500, whichever is the lesser). We'll also calculate a payment for lost frequent flyer points. While there are limits for each of these, overall there is no limit on how much cumulatively we will cover."
Don't be out of pocket
And if you're still not sold on travel insurance, here's another figure that might change your mind.
If reports about a 10-day delay are correct, Sylvester estimates an insured person could be eligible for reimbursement of $2500 or more compared with an uninsured person who would be out of pocket for this amount or more.
"This event highlights exactly why travel insurance is so necessary," he says.
"A policy for a single 33-year-old person travelling to Bali for a week would set them back less than $50. We can't get you home any faster than your airline can and can't compensate your for inconvenience, but we can make sure you're not out of pocket because of it."
And if you're stranded in Bali, here's Sylvester's top tip: before you spend hundreds of dollars on a business-class seat you've found that is leaving Bali, check with your insurer.
Being stranded is not an excuse to spend huge amounts of money to find a way home and expect it to be covered by your insurance. The key word in your policy document is "reasonable" costs.
Shopping around for the right travel insurance is probably the least exciting aspect of planning your holiday but it's perhaps the most important, so don't leave home without it!