Baby’s day out

Katie and her family decided to undertake a multi-stop journey through South America to visit her in-laws. When they reached Uruguay, Katie’s eleven-month-old daughter was not allowed to board their connecting flight to Peru. The airline said her daughter’s boarding pass did not match the name on her passport. As Katie could not leave her daughter in South America, she called her travel insurance company.

Katie purchased new flights to Peru for her family. When she returned to New Zealand, Katie made a claim for the costs associated with their replacement trip, including new flights, accommodation and food costs and cancelled hotel bookings.

The insurer decided that, while Katie had suffered an “unforeseeable event”, the policy excluded cover for losses arising from the negligence of an airline. Katie would need to recover her costs from the airline or her travel agent. Katie said she had made a complaint to the airline, but had not received a response.   

Katie complained to FSCL. wanted to be compensated for approximately $5000 in losses arising from the cancellation and replacement costs of her journey.



Upon review, we did not agree with the insurer. The clause in the travel policy excluded cover for the negligence of a “charter airline”, not a commercial airline. The context of the exclusion made it abundantly clear that it was to prevent an increased risk of claims arising from the negligence of small business and charter operators which may be unpredictable. It would not be reasonable to consider a commercial airline fell under the exclusion.

We found that Katie was entitled to the policy’s maximum benefit for her irrecoverable travel and accommodation expenses, as well as costs associated with the cancellation of her journey.

We also found that the insurer had not corresponded with Katie in a timely manner and had breached the Fair Insurance Code. We recommended that the insurer pay Katie’s claim and compensate her $100 for stress and inconvenience.



The insurer agreed with our recommendation and a settlement amount was negotiated between the parties. The insurer also offered to Katie $200 in compensation for the stress and inconvenience caused.  The complaint has settled.  


Insights for the participant

As the insurance policy forms the contractual basis between parties, the onus rests on the insurer to prove that an exclusion applies if it seeks to rely on an exclusion clause to decline cover. It is important that exclusions are considered in their plain meaning and in the context of the policy.

The Fair Insurance Code requires insurers to act fairly and respond to complaints within ten working days.