In November 2024, Timothy* incurred medical expenses when he was hospitalised while travelling with his wife Anneke*. They submitted several claims under their travel insurance policy.
Two of the claims were accepted by the insurer in late November and early December 2024. However, although the insurer told Timothy that payment had been made, the money was not received until January 2025, around a month later.
A third claim, relating to accommodation and food costs following hospitalisation, was declined. The insurer said these costs were not “additional” to what had already been planned in the original travel itinerary.
Reimbursement to the insurer
Because Timothy became unwell during the trip, the couple couldn’t use their original return flights. The insurer agreed to purchase new return flights for Timothy and Anneke. In return, Timothy agreed to pass on any refund received from the original flights. The insurer later said that Timothy had received refunds totalling $1,833 but had not repaid this amount.
Service issues
Timothy and Anneke raised concerns about the service they received from the insurer in processing their claim. They said there were delays and a lack of updates, that they were passed between different teams, and that the insurer continued to contact Anneke directly despite being asked not to do so. Timothy also said the Insurer had not provided requested information, such as call recordings and file notes.
Timothy and Anneke complained to FSCL.
Settlement offer
The insurer said that an internal error had caused the delay in them making the claim payments to Timothy and Anneke; their system was trying to make payment to an Australian bank account, instead of Timothy and Anneke’s New Zealand bank account. To resolve the service issues, the insurer offered to reduce the amount Timothy and Anneke owed them by $500, bringing the amount down to $1,330. They also offered to provide a written apology.
Timothy and Anneke said the offer was insincere and was not a fair acknowledgement of their experience. Timothy and Anneke requested the full $1,830 to be waived.
FSCL’s review of the complaint
We considered it fair that Timothy and Anneke repay the refunded amount, because having the benefit of the insurer paying for the new flights, and the refund for the unused flights, would result in double benefit.
We accepted the insurer’s explanation for the payment delays, but we also considered that the delays were avoidable and understandably frustrating. The insurer should have acted sooner once it was clear that payments were supposed to be made to a New Zealand bank account.
We were also satisfied that Timothy and Anneke’s experience would be fairly recognised by the letter of apology the insurer was willing to write.
Overall, we considered a written apology and a $500 reduction in the amount to be repaid to be a reasonable settlement offer to resolve this complaint. Timothy and Anneke accepted our view and discontinued their complaint.
Insights for insurers
If you rely on free travel insurance provided with a credit card, it is important to check the policy wording carefully to understand what is covered and what is not.
