What you need to know if the Bali volcano threatens your holiday

Hi Nicole, I wonder if you can help me. We have a holiday booked to Bali in early December. I guess we're lucky it's not this school holidays. But I am wondering where we stand re the volcano and travel insurance. We have bought standalone travel insurance as I just felt more comfortable doing that after your recent comments on credit card travel insurance. The whole thing still makes me really nervous though. Should we still plan to go? - Susan, Wood End

Susan, your situation depends on two things: the wording of your policy and the date of its purchase.

It's by no means across the board, but standalone insurance would usually cover natural disasters (as indeed, complimentary credit card travel insurance usually would, too).

But the extent of that coverage varies widely. You need to delve into the product disclosure statement and check whether it extends to extra travel and accommodation costs, additional meals, missed transfers etc. You must also hunt down any caps on these further costs.

Which brings me to "date of purchase".

A little like exclusions for pre-existing medical conditions, pre-existing geological activity won't be covered either. In the case of Bali's Mount Agung, you need to have bought your insurance before the current threat of eruption and disruption.

Large insurer QBE has even announced a cut-off on claims relating to the volcano for policies purchased after 2pm on September 21.

For other readers, that means it's too late to buy insurance for Agung-related issues (but remember credit card insurance is usually triggered when you make the necessary trip spend - if this is relevant to you, check). Naturally, it's not too late for unrelated issues, like accident or injury while overseas.

However, if you're confident you tick these two boxes, Susan, you should be covered for any trip cancellation costs if volcanic activity prevents you taking your trip in December. But cancel by choice, in advance, and you may forfeit deposits or incur flight change fees.

Interestingly, if anything happened once you'd already left Australia, it's possible you would get free nights and meals in Bali (less the excess). Of course, you'd need the work leave to cover them.

Just be sure to keep your (itemised) receipts and book further accommodation to the same standard as the original. Most policies will use the word "reasonable" or some such to describe what will be covered.

Always ensure the airline itself has your phone number in case of flight cancellations or delays, and not just a travel agent. Also confirm the status of any Bali flight before setting out for it.

Finally, remember the volcano itself is 72 kilometres from Kuta. And hopefully your holiday is sorted!

Nicole Pedersen-McKinnon is a money educator and consumer advocate: themoneymentorway.com. You can write to her for help solving your money problem, or with a consumer question, at nicolehelps@fairfaxmedia.com.au.

This story What you need to know if the Bali volcano threatens your holiday first appeared on The Sydney Morning Herald.