Travellers purchasing insurance since the eruption of the volcano in Iceland will not have disruptions to their travel due to this event covered under their policies, an insurer has warned.

NZ-based Southern Cross Travel Insurance says while it is happy to pay out claims on natural disasters which affect policyholders, travellers booking trips since the eruption began should be aware that their plans may be disrupted and cannot expect insurers to pay compensation.

“Speaking generally for the industry, most of us set a trigger point,” CEO Craig Morrison told insuranceNEWS.com.au. “If you bought our policy before April 15, you are going to be covered, but most of us say that if you buy your policy after that then you are not going to be covered, because it is no longer unexpected that you could have a delay.

“People don’t really understand that they can’t go and book a non-refundable $20,000 Mediterranean cruise because they may not get there.

“They think they can pass all risks on to the insurer, but that’s not true.”

Southern Cross has so far received more than 500 claims from NZ travellers and expects to pay out between $NZ500,000-$1 million ($400,640-$801,500) in claims related to the Iceland eruption.