James and Isla booked flights to Queenstown for a guided hiking tour in March 2023. Their hiking tour was scheduled to begin the morning after they arrived in Queenstown.
James and Islas’ flight was cancelled due to poor weather while they were at the airport. They bought tickets for the only other flight to Queenstown that day to make their hiking tour on time. Their replacement tickets cost an additional $150. James and Isla bought a meal at the airport because their replacement flight departed later in the day.
James and Isla contacted the airline that day to request a refund for their cancelled flights. They also wanted the airline to cover the additional cost of their replacement flights. The airline gave James and Isla a credit voucher equal to the value of their cancelled flights.
In early April, James and Isla contacted their travel insurer because they wanted a full refund rather than a credit voucher, compensation for the additional cost of their replacement flights, and compensation for their airport meal.
The airline gave James and Isla a full refund and voided their credit.
In May, the insurer told James and Isla that they could not claim the additional cost of their replacement flights or their airport meal. The policy said the insurer would pay ‘reasonable additional expenses’ if the insured was unable to attend a ‘sporting event’ due to unforeseen and uncontrollable circumstances.
The insurer said the policy did not apply because a scenic hiking tour was not a ‘sporting event’. James and Isla challenged the insurer’s decision.
The insurer compromised on their initial decision and accepted James and Islas’ claim for airport food. The insurer maintained that James and Isla did not have a valid claim for the additional cost of their replacement flights.
James and Isla complained to FSCL.
Dispute
The key issue in James and Islas’ complaint was whether their hiking tour was a ‘sporting event’ under their insurance policy.
The insurer said the hiking tour was a ‘leisure trip’ rather than a ‘sporting event’. On this basis, the insurer said the hiking tour was not covered by their policy. The insurer said that the policy wording was clear; James and Isla had an obligation to read and understand it.
James and Isla said the hiking tour was a ‘sporting event’. They wanted $150 for the additional cost of their replacement flights.
Review
We reviewed the insurance policy, and the insurer’s correspondence with James and Isla. We thought the insurer applied the policy correctly. James and Islas’ hiking tour was not a ‘sporting event’ under the policy wording.
It was our view that James and Isla should discontinue their complaint.
Resolution
James and Isla accepted our preliminary view and discontinued their complaint.
Insights for consumers
When buying insurance, it is important to read the policy wording thoroughly to ensure you are aware of what events give rise to valid claims.
