Ken and Kaye planned a cruise from Rome to Singapore. The couple flew from Auckland on 14 May and arrived in Rome on 16 May. They were then planning to board the cruise ship in Rome, travel to Singapore, and arrive back in New Zealand on 19 June. Ken and Kaye relied on the complimentary travel insurance attached to their credit card supplied by their bank.
Ken and Kaye had some pre-existing medical conditions, and called their insurer to seek cover for them before travelling. Most of the conversation was about the conditions, but during the call Ken and Kaye advised their travel dates were from 15 May until 18 June 2017. Based on those dates, (including both the first and last day of travel) the journey was 35 days, and the policy’s maximum journey duration for cover to apply was 35 days. The insurer’s staff member did not mention the maximum journey duration was 35 days.
After arriving in Rome, Ken fell down a flight of stairs. He was admitted to hospital and was unable to board the cruise. Ken contacted the insurer which advised that, because the trip was for longer than 35 days, the policy did not provide any cover at all.
After returning to New Zealand, Ken and Kaye complained to FSCL about the insurer’s decision.
Ken and Kaye said that because Ken’s injury occurred within the first 35 days of the trip, there should be cover.
We found the complaint should not be upheld and that the insurer had correctly declined the claim.
Credit card travel insurance differs from other travel insurance in that it only activates when certain criteria are met. Until the policy is activated, the insurer is not obliged to compensate for loss because no contract of insurance exists.
To activate the policy, Ken and Kaye’s trip could not exceed 35 days. However, their actual journey length was 37 days. Although Ken’s injury happened on the second day of the trip, no contract ever existed because the policy was never activated.
However, with reference to the pre-existing medical condition call, we suggested to the insurer that where a person’s journey is very close to being or is outside the policy activation limit for the length of the trip, it should consider mentioning the 35-day limit.
Our insight for consumers
It is critical you read and fully understand your policy, including trip length activation requirements. There can also be other activation requirements where half the trip’s cost must be paid for with the credit card.
In addition, the nature of the complimentary travel insurance is that it may not provide as extensive cover as one might expect from another travel insurance product.