Bridie purchased two airline tickets to visit her son in Christchurch. She paid $150 in total for the fare cost credit card fees.
Unfortunately, on the day she was to return home, the airline notified Bridie the flight had been cancelled.
Bridie was upset. She needed to return home as she was running out of medication and had upcoming surgery to prepare for. Bridie rushed to the airport with her ailing husband to find a new flight.
The airline offered Bridie a refund for her tickets. It also offered to pay for her overnight accommodation and meals. However, it was not able to offer a replacement flight until the next day.
Bridie was able to secure a return flight with another airline for $600. Upon returning home, Bridie claimed the cost of the replacement ticket from her travel insurance company.
The insurance company accepted the flight cancellation was an “unforeseeable circumstance” and that Bride felt pressured to purchase new flights with another airline due to her personal situation. However, it declined Bridie’s claim because her policy did not cover replacement costs with another airline. Also, Bridie had not suffered any loss as the airline had refunded Bridie for the cancelled ticket.
Bridie complained to FSCL. She had only received part of the costs of her cancelled ticket from the airline and felt it was unreasonable that, despite having insurance, she was not compensated for her replacement flight.
We agreed that the travel insurance policy was clear. It did not provide cover for replacement flights with another airline. Bridie was unable to claim the cost of her new airline ticket.
However, to resolve the complaint we recommended the insurance company should take a pragmatic approach. It should compensate Bridie for the shortfall from the airline’s refund, and the food and accommodation expenses Bridie would have incurred due to the cancelled flight. These were costs the insurance company would have had to pay if Bridie had waited until the next day to travel.
The insurance company agreed to compensate Bridie as we suggested and the complaint was settled.
Insights for the participant and the complainant
A consumer’s expectation of what their insurer is prepared to cover can often be very different from what the policy says. The onus is on the consumer to read and understand their policy wording. If in doubt, it is advisable to contact the insurance company in the first instance to check that costs will be covered before committing to those costs.