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An Untimely Restructure

Ben’s trip to Europe

Ben booked a trip to Europe and travel insurance through his travel agent. His trip was scheduled for 25 November 2012 to 27 February 2013.


On 17 October 2012 Ben’s employer announced it was restructuring, putting Ben’s position in jeopardy.


Ben’s employment union told him it was vital he attend a meeting about the restructure scheduled for 4 December 2012, if he wanted to be redeployed within the company.


Ben cancelled his trip through the travel agent. Ben’s insurance company declined cover because cancellation was caused by an employer’s request, which was a clear exclusion under the policy. Ben referred the complaint to FSCL to review.



Ben conceded early on in FSCL’s investigation that he should have read the fine print of his policy. Ben claimed for half the cancellation costs being $1,371.


FSCL did not accept the insurance company’s submission that the trip was cancelled because of an employer’s request. The direction to attend the meeting came from Ben’s union, not his employer.


Ben complained that he had been misled by the travel agent both when he sold Ben the policy, and when Ben cancelled the trip. FSCL concluded the travel agent was not required to advise Ben on all clauses in the insurance contract. At law, the insurance policy holder has an obligation to read the insurance policy. In addition there was no evidence that the travel agent had misrepresented that Ben’s claim would be upheld by the insurance company.


Ben also complained that the insurance company had misled him by sending him a claim form when he called to discuss his claim before it was submitted. FSCL concluded the insurance company call centre employee did not need to give any assessment of the claim over the phone, before the claim was submitted.


FSCL reviewed the insurance contract and concluded there would only be cover if Ben could not re-arrange his travel. On the evidence provided, FSCL found that Ben had not attempted to re-arrange his travel and the insurance company was entitled to decline the claim. Ben accepted this and withdrew his complaint.


FSCL did recommend that the insurance company advise travel agents and its call centre staff to point out to customers the obligation to explore re-booking options before cancelling travel, and add a clear note of this obligation to the policy wording.


FSCL also noted that Ben wanted to recoup money on his trip because of the potential negative effect on his financial situation if he did lose his job. FSCL highlighted that this is not the purpose of travel insurance. Rather, the purpose is to cover for actual financial loss.