In mid-April, when the Icelandic volcano with the unpronounceable name blasted so much ash into the air that many European airports had to shut down for a week, we had a number of thoughts. The first thought centered on how powerless, ineffectual, and even irrelevant the human race is in the face of the power of Nature. The second thought was, "Well, at least there's no one who can be blamed and sued." (Though, one should never underestimate the power of the legal profession to profit—natural disaster or not.) 

The third thought focused on our fellow owners of vacation-rental properties and all those stranded guests. The forfeited deposits and the lost rental income are not likely to be included in estimates of what the eruption cost. But we're certain the costs will be significant. 

In a word, it's a mess. Particularly if a guest booked the week of the eruption, and you have back-to-back bookings for the next couple of weeks. As we all know, most VR owners do not have an elastic supply of rental units. 

Would Travel Insurance Help? 

The question is: Would those stranded guests have been helped if they had purchased travel insurance with coverage for trip cancellation/interruption? The answer is almost certainly "Yes." Such policies typically reimburse travelers for the loss of nonrefundable, prepaid travel expenses—such as the weekly rental charges that most VR owners require to be paid in full 30 days or more prior to their guests' arrival date.  

More specifically, according to the Wall Street Journal ("Is Travel Insurance Worth the Cost," April 24, 2010), most U.S. insurers whose policies were issued before the volcanic eruption are paying claims under "natural disaster" or "weather events" coverage. The Journal quotes an authority as saying that, "The ash is carried by the wind and hence is a weather event." (Of course, now that the eruption is a "known event," the companies will not insure against its effects.)

The cost for travel insurance is usually about 4% to 8% of the total cost of the trip. Details vary all over the place, but there is no need to wade into the deep weeds here.

What's the Benefit for VR Owners?

The next question is: Why should you, as a VR owner care whether your booked guests are insured or not?

The answer is "rebooking." Think about it for just a minute. The fact that someone chose to spend a week in your VR at your location is not an accident. It is most likely the result of careful consideration and thought. In flexing her muscles, Mother Nature has taken that experience away from them--for now.  

But if they have travel insurance, their main cost is their time (and the stress and aggravation), not the money. Thanks to the trip cancellation and trip interruption coverage typically included in such policies, they will be reimbursed for their expenses and have the money to book with you again, once the skies clear.  

Help Spread the Word! 

That's why it's so important to educate your prospective renters about the availability of travel insurance whenever you can. Make sure they understand the concept, and direct them to a site like InsureMyTrip for more information.  

Here's the wording we use, at the website we've created for our vacation property, in our online listings, and in our reservation confirmation message to guests:

As Brian Sharples, the head guy at industry-leader HomeAway®, has frequently pointed out: The vast majority of travelers worldwide have no idea that the vacation-rental alternative even exists. (He and HomeAway have begun to address this situation, starting with the recent National Lampoon Vacation-themed Super Bowl ad.)  

Most people don't know about the travel-insurance option, either. Volcano or no, it is in everyone's best interest to spread the word.

Copyright © Alfred & Emily Glossbrenner, FullyBookedRentals.com. All Rights Reserved.