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Change of residency laws lead to a change of plans, and a declined claim

Mr and Mrs Anderson’s daughter in law, Anya, was originally from Belgium, with New Zealand residency. The Andersons’ son Bill, Anya, and their children, moved from New Zealand to Belgium at the beginning of 2015. At that time, Belgium’s immigration laws allowed Bill to continue running his business from New Zealand as his source of income, while living in Belgium. Bill also started the process of gaining Belgian residency.

In August 2015, the Andersons travelled to Belgium to spend time with their family. Soon after they returned to New Zealand in September 2015, they booked tickets to travel to Belgium again in August 2016.


The law change

In October 2015, Bill and Anya attended a final interview about Bill’s application for Belgian residency. Bill and Anya were advised Belgium’s immigration laws had changed in July 2015. This was the first Bill and Anya knew about the law change.

The effect of the law change was that Bill’s source of income could no longer be in New Zealand; he needed to be employed or self-employed in Belgium. For a number of reasons Bill was unable to obtain employment in Belgium, and Bill, Anya and the children, moved back to New Zealand.

As a result, the Andersons decided they would cancel their intended trip to Belgium in August 2016, with cancellation costs of around $5,000. Without their family living in Belgium, the Andersons had nowhere to stay, and they could not speak the language. The Andersons submitted a claim to their travel insurer, the claim was declined, and the Andersons complained to FSCL.


The insurer’s view

The insurer said the Andersons had not satisfied the ‘insuring clause’ in the policy which provided cover for unexpected and unintended events outside the Andersons’ control. The insurer said that because the Andersons booked their August 2016 trip before Bill’s residency was finalised, there was a known risk that Bill, Anya and the children would be unable to remain in Belgium.

The insurer also said it was the Andersons’ decision not to travel to Belgium because their family no longer lived there. This meant the decision not to travel was within the Andersons’ control.

Lastly, the insurer said that even if the Andersons had met the requirements of the insuring clause, there was an exclusion clause in the policy excluding cover for a claim arising from a change of plans, which excluded the Andersons’ claim.


The Andersons’ view

The Andersons did not accept the insurer’s decision. They said even though the immigration laws had changed in July 2015, Bill and Anya only found out about this in October 2015, after the Andersons had booked their trip.

The Andersons’ understanding was that the Belgian authorities did not foresee any difficulties in Bill gaining residency. Further, Anya, Bill’s wife, was a Belgian citizen.



We found that although the Andersons never expected Bill would not gain Belgian residency, there was always the risk Bill’s application would not be successful. On this basis, we said that Bill not gaining residency could not have been wholly unexpected by the Andersons.

We could understand why the Andersons booked their trip for August 2016 a year in advance, to get the best flight deals. However, the Andersons could have mitigated their loss by delaying purchasing flights until the conclusion of Bill’s residency application process.

The policy also included a clause excluding cover if the insured was aware of any reason why their trip may be cancelled. Because of the known risk of Bill’s residency not being granted, the Andersons were aware of a reason why they may not wish to travel in August 2016.

We also agreed with the insurer that the decision not to travel was because of a ‘change of plans’ or ‘disinclination to travel’, and the policy excluded cover. We could understand why the Andersons decided not to travel, however travel insurance policies do not exist to cover people for situations where they would ‘rather not’ travel.

The Andersons, although disappointed, agreed to discontinue their complaint.


Our insight

It is common for travel insurance policies to exclude cover where a person has a ‘change of mind’ or a ‘disinclination to travel’. We could understand why the Andersons did not travel – a lot of people would make the same decision. However, costs incurred as a result of changing travel plans is unlikely to be something covered by travel insurance.