The fire
A fire onboard an Ethiopian Airlines plane at Heathrow airport on 13 July 2013 caused disruption to travel in and out of the airport.
Sally and her friend Martha had pre-booked flights from Edinburgh to Heathrow with an onwards flight to Oslo on 13 July 2013. Sally and Martha were due to head off on a tour of Norway departing on 14 July 2013. The women then had pre-booked flights for 21 July 2013 from Oslo to Heathrow and onward flights from Heathrow to Auckland.
The fire caused widespread flight delays and cancellations. Having made it late to Heathrow and without any way to make the start of the Norway tour, Sally and Martha cancelled their trip to Norway. This meant they were in London with no pre-booked travel to New Zealand until 21 July 2013.
The first class ticket
Sally and Martha’s airline provided them one night’s accommodation on 13 July 2013 in London. When the women returned to Heathrow on 14 July 2013 they could not get any economy flights home and said they were having trouble finding accommodation. This was because of all the other people whose travel had been affected and because of other popular events in and around London being held at the time.
Sally contacted her travel insurer. Sally was told by the insurer that she was entitled to $200 for the first 6 hours of delay and $200 for any full 24 hour period after that (which would have been $1,800 for the 9 day period until her pre-booked flights on 21 July 2013). Sally said that her travel insurer was not very helpful in assisting her to make alternative arrangements.
Sally and Martha were advised at 9pm on 14 July 2013 that there were two first class tickets available that night for a flight at 10:05pm. Sally purchased one of the tickets costing $8,800. Sally did not seek her travel insurer’s pre-approval for the purchase of the ticket.
The complaint
Sally claimed the cost of the first class flight as well as the cost of the cancelled Norway trip, the Oslo/London flights, the pre-booked flights from London to New Zealand which she did not use, and some additional costs for travel in London after the disruption to her flights.
Sally’s travel insurer paid all the costs claimed except the first class ticket and the additional London travel costs. Sally complained to FSCL that the insurer had incorrectly declined to cover these costs
FSCL review
We agreed with the insurer that the cost of the first class ticket should not be covered.
Our key consideration was the section of the insurance policy which said that the insurer would reimburse reasonable additional accommodation and travel expense if a journey was disrupted.
Sally’s travel agent gave her information after she returned to New Zealand that the cost of accommodation, food and transport to stay in London until 21 July 2013 would have been around $6,000.
We considered that a person in Sally’s position may have expected to incur costs of approximately $4,200 to stay in London through to 21 July 2013 ($6,000 less the $1,800 the insurer indicated Sally would be entitled to).
The amount of $4,200 was considerably less than the cost of the first class ticket. On this basis, we considered that the cost of the first class ticket was an unreasonable expense. As Sally had not satisfied the insurance policy terms, there could be no cover for the first class ticket cost.
Outcome
We recognised that if Sally had stayed in London she would have incurred some costs. We asked the insurer to make an ex-gratia payment of $450, plus pay the claim for the $50 additional travel expenses in London which were reasonably incurred.
The parties agreed to settle the complaint by way of a $500 payment from the insurer.
Lesson to be learned
You always need to take any reasonable steps to mitigate your loss when you find yourself in a situation where you may have to make an insurance claim. In addition, especially when you are looking to incur large costs, you should always seek pre-approval from your insurer before incurring them.
