Expect the unexpected

Carrie’s sister, Lisa, was living on a remote Pacific Island. Lisa was pregnant, and intended to travel to New Zealand to have her baby. Carrie was living in the United States, and decided she wanted to spend some time with Lisa and her new baby, so booked air tickets to New Zealand and arranged travel insurance.

Lisa’s employer unexpectedly terminated Lisa’s employment and Lisa returned home to the United States to have the baby. Carrie now had no reason to come to New Zealand, so she cancelled her trip. Carrie submitted an insurance claim for the cost of her cancelled airfares.

The insurer’s view

Carrie’s insurer declined her claim, referring to a policy exclusion for a claim arising from pregnancy. Carrie did not accept the insurer’s reasoning, and asked the insurer to reconsider.

The insurer reassessed Carrie’s claim, and agreed the pregnancy exclusion did not apply. However, the insurer considered it was entitled to decline Carrie’s claim under another policy exclusion, saying that Carrie had changed her plans.

Carrie referred her complaint to FSCL.

Carrie’s view

Carrie did not accept that she had changed her plans. Carrie referred to the policy saying that her journey was cancelled as a result of Lisa’s unexpected, unintended return to the United States. When Carrie purchased the tickets, she had no expectation that Lisa would not be in New Zealand. Once Lisa had returned to the United States there was no reason for Carrie to continue with the trip.

Carrie also complained about the insurer’s complaints process, referring to the claim being declined under the wrong exclusion, and the time taken to respond to the claim and complaint. From Carrie’s perspective a mistake had been made, and compensation was warranted.


We accepted that Carrie did not cancel the trip on a whim and that Lisa’s return to the United States was unexpected, unintended, and outside Carrie’s control. The only reason Carrie was coming to New Zealand was to see Lisa. While we could understand Carrie’s decision to cancel her trip, we considered Lisa’s return to the United States did not actually prevent the trip. Although Lisa would not be in New Zealand, Carrie could have continued with the journey.


We recommended Carrie discontinue her complaint because, in our view, the insurer was entitled to decline the claim. The unexpected and unintended events did not cause the journey to be cancelled, but rather it was Carrie’s decision not to travel that caused the cancellation. This meant that the policy exclusion, which said that there was no cover for a change of plans applied.

Although the insurer initially declined the claim under the wrong exclusion, we were not convinced that compensation for inconvenience was appropriate. We did not consider delay of one or two days outside the Fair Insurance Code’s guidelines warranted compensation for inconvenience. Everyone in everyday life can be expected to encounter inconvenience. We will only recommend compensation where we can see a participant’s actions have had significant consequences for a complainant and we were not satisfied that Carrie’s circumstances met this test.

Key insights for the complainant

Sometimes travel plans can change, but this does not necessarily mean the journey will be cancelled. Unless the specific event is covered by the policy, an insurer is generally only obliged to cover travel costs where an unexpected event actually causes the journey to be cancelled, and the claim is not otherwise excluded.