An ill-fated cruise: Insurance policies with age restrictions


Andrew and Penny took a two week cruise on the Southern Sapphire cruise ship. The cruise travelled around several New Zealand ports, spent a night at Melbourne’s port and headed back to New Zealand.


Andrew and Penny received complimentary travel insurance with FEND Insurance (“FEND”) when they booked overseas travel using their bank credit card.


While the ship was at sea between Napier and Wellington, both Andrew and Penny fell ill with gastroenteritis and were quarantined for 5 days on the ship. They incurred medical costs of $1,914.16 AUD.


The claim

Andrew and Penny submitted a claim for their medical costs to FEND. FEND declined their claim because both Andrew and Penny were over 75 years old. The policy wording excluded all medical related cover for customers aged over 75 years, unless there has been a Mature Age Assessment carried out. 


Andrew and Penny’s view

Andrew and Penny said they were unaware of the policy’s age restriction and the requirement for them to undergo a Mature Age Assessment if they wanted cover for medical related costs.


Andrew and Penny argued that FEND should accept their claim because they were misled by their bank about their eligibility for cover. Penny had called her bank after they made their final payment for the cruise using their bank’s credit card. Penny said she called to check her understanding that by paying by credit card their travel and non-pre-existing medical conditions would be covered. She recalled being told that her understanding of the cover under the policy was correct. The bank was aware of Penny’s age at the time of the call as she provided her identification details, including her date of birth, at the start of the call. Penny said that the bank never told her about the clause in the policy that excludes medical related cover for those aged over 75 years.


FSCL’s view

We agreed with FEND’s decision to decline Andrew and Penny’s claim and we suggested Andrew and Penny discontinue their complaint against FEND. The policy wording was clear that there is no medical related cover for customers aged over 75 years without a Mature Age Assessment being carried out.


It was unfortunate that Andrew and Penny were unaware of the requirement in the policy for them to undergo a Mature Age Assessment to be covered for medical-related costs. However, it is standard industry practice for an insurance company to set out the terms and conditions under its insurance policy. It is then up to the customer to read the policy and understand those terms and conditions. We found Andrew and Penny’s claim did not meet FEND’s terms and conditions for cover to be provided and FEND was entitled to make a decision based on these terms and conditions. Our view was that FEND had acted appropriately in declining Andrew and Penny’s claim.


We also found that Andrew and Penny’s argument that they were misled by their bank about their eligibility for cover was a complaint against the bank and not FEND. The bank was not a FSCL participant, and we could not investigate a complaint against it. We suggested Andrew and Penny contact the Banking Ombudsman Scheme if they wanted to make a complaint against the bank.


Further comments

FEND declined Andrew and Penny’s claim for a second reason. Andrew and Penny were within New Zealand waters and as a result not “overseas” when they fell ill. However, FEND’s policy only provides cover for overseas travel. As we found that Andrew and Penny did not have cover because of their age, we did not analyse whether FEND would be entitled to decline the claim on the basis of its interpretation of ‘overseas travel’. This aspect of the complaint further highlights the importance of reading insurance policies and understanding what aspects of your travel will and will not be covered. Andrew and Penny’s insurance was largely inappropriate for their travel as only a small proportion of their travel was outside of New Zealand’s waters. You will need to ensure your travel policy is not limited to overseas travel if you want insurance cover for a cruise within New Zealand waters.