The delayed flights
On 27 December 2015, Lynley was scheduled to travel from Nashville to Dallas to Houston to New Zealand. Unfortunately, Lynley’s Dallas to Houston flight was cancelled, and she was booked on another Dallas to Houston flight, but this was also cancelled. The next available flight from Dallas to Houston was 48 hours later, meaning Lynley would miss her connecting flights to New Zealand.
Lynley needed to take medication each day and had enough tablets with her in the event she incurred delays of 24 hours, but not 48 hours.
Lynley decided to rebook flights from Dallas to Los Angeles to Brisbane to New Zealand. Lynley’s flight from Dallas to Los Angeles was then delayed and she missed her connection to Brisbane. Lynley then booked a flight from Los Angeles to Honolulu to New Zealand. Lynley arrived home in New Zealand 24 hours later than originally planned.
Lynley submitted a claim to her travel insurer for:
- The cost of her new flights – $3,882.07.
- Flight and airport taxes – $105.41.
- Food purchased at Dallas airport – $14.09.
Lynley’s insurer only paid her $14.09. The insurer said its policy only provides cover for accommodation and food costs (up to $200), and only flight costs incurred as a result of travel delays for the outward leg of a trip. Because the delays were on Lynley’s return leg, there was no cover for her new flights, or the taxes.
Lynley did not accept her insurer’s decision. Lynley said the policy did not explicitly say there is only cover for flight costs incurred as a result of delays on the outward leg of a journey.
Lynley also said that because she changed her flight arrangements to leave Dallas earlier, she did not incur the food and accommodation costs she would have incurred had she waited the 48 hours in Dallas. Lynley said her insurer should pay her the equivalent of 48 hours (two days) of accommodation and food costs ($400), because the policy allowed for $200 per day, not $200 overall.
Insurer’s offer to resolve complaint
Although it maintained its decision to decline the claim, to resolve the complaint the insurer offered to pay Lynley $185.91 in full and final settlement. That is, the $200 under its policy for food and accommodation costs, less the $14.09 already paid. This was on the basis that if Lynley had stayed in Dallas for 48 hours, the insurer would have paid her the full $200 benefit under the policy.
Lynley did not accept the insurer’s offer, and referred her complaint to FSCL.
We asked Lynley whether she would have stayed in Dallas awaiting the flights her airline had rebooked for her, if she had enough medication with her. Lynley confirmed she would have. We also asked whether Lynley could have seen a doctor in Dallas to be prescribed additional medication. Lynley said this would have cost hundreds of dollars, and with the medication itself costing around $600, seeing a doctor was not an option.
We also asked Lynley whether she told her insurer before travelling, about the pre-existing medical condition (PEMC) for which she took the medication. Lynley had not. Lynley also confirmed she did not have time to call her insurer from Dallas airport to check whether she would be covered, before booking the new flights.
After reviewing all the file information we suggested Lynley accept the insurer’s offer.
$200 in total, not $200 per day
The policy did not provide $200 per day for food and accommodation costs incurred as a result of delays; the maximum amount was $200. Even if Lynley had remained in Dallas for 48 hours awaiting her flight, the maximum she would have received was $200.
Outward leg or return leg?
We did not agree with Lynley’s view that there could be cover for costs incurred as a result of delays, on a return leg of a journey. The policy clearly stated there was only cover for these costs on the outward leg of the journey. This meant even if Lynley had stayed in Dallas for 48 hours, and still incurred rebooking costs, those costs would not be covered.
We also noted when there is a delay or cancellation of flights, most airlines simply book customers on the next flights available to get to their destination, free of charge. This was why the insurance policy only provided $200 for accommodation and food costs, while a person awaits their rescheduled flights.
Mitigation of loss
It was unfortunate Lynley was unable to contact the insurer from Dallas airport before re-booking her flights. If she had called, Lynley’s insurer may have been able to advise her she only had $200 of cover, for hotel and refreshment costs. Lynley may then have assessed whether she would completely rebook her flights, or whether there were other options available to mitigate her loss. Because Lynley did not contact her insurer, it did not have the opportunity to assist her.
We also said it would have been prudent for Lynley to have carried more than 24 hours of additional medication with her on her trip. It is reasonably foreseeable that flights may be delayed, especially over the Christmas holiday period and during the Northern Hemisphere’s winter.
We said the insurer’s offer to pay Lynley $185.91 was a reasonable one. Although disappointed, Lynley accepted $185.91 in full and final settlement of her complaint.
Different travel insurance policies provide different types of cover, as outlined in the full policy wording. It is up to the customer to read the policy and decide whether it provides adequate cover for their requirements. It appeared Lynley expected there would be more extensive cover under her insurance policy than what it actually provided.