Abigail was invited to talk at a conference in Europe in April 2020. Abigail booked her flights and purchased insurance on 24 February 2020, planning to leave New Zealand on 20 April 2020, returning on 28 April 2020.
On 12 March 2020 the country Abigail was intending to visit announced a two-week national lockdown. The next day, the conference organisers postponed the conference until October 2020. Abigail immediately cancelled her flights. Unfortunately, the airline only refunded 10% of the cost of the tickets, so Abigail submitted an insurance claim for the balance.
The insurer declined the claim saying that when Abigail purchased her tickets in late February 2020, Covid-19 was considered a known event. The insurer explained that insurance is only intended to cover unforeseen events, and, by 24 February 2020, Abigail ought to have been aware of the possible Covid-19 related disruption.
Abigail did not accept the insurer’s decision and complained to FSCL.
Dispute
Abigail said that when she purchased the tickets there were no travel restrictions and she expected she would be able to talk at the conference.
Abigail also said that if, after 30 January 2020, the insurer did not intend covering Covid-19 related claims they should not have continued to sell insurance without telling people there would be no cover for Covid-19.
Review
We referred Abigail to the policy wording. Under the policy the insurer agreed to compensate Abigail for unforeseen consequences beyond her control. While the conference cancellation was outside Abigail’s control, we were not convinced it was ‘unforeseeable’. ‘Unforeseeable’ is an event that cannot be anticipated or predicted.
By 24 February 2020 there was a lot of information in the media about Covid-19. Abigail was planning on attending an international conference, with people travelling from all over the world. Given the rapid spread of Covid-19 through many countries, by 24 February 2020 we considered it was possible that the conference organisers would decide to postpone the event. Although, in February 2020, the full extent to which Covid-19 would change the world may not have been known, it was our view that disruption to a conference only one month away could not be considered unforeseeable.
Abigail also questioned why the insurer allowed her to purchase a policy on 24 February 2020 without drawing her attention to the limitations with respect to Covid-19. However, the insurer did have information on their website advising that Covid-19 related loss would not be covered. Although the insurer was not prepared to take the risk of loss associated with Covid-19, they continued to insure against other loss, for example lost luggage or medical costs unrelated to Covid-19. The policy therefore had some value outside of Covid-19.
Resolution
We suggested to Abigail that she discontinue her complaint because, in our view, her loss was not covered by the policy. We did not hear back from Abigail and closed our file.
Insights for consumers
If you purchased travel tickets after 30 January 2020, your insurer may be entitled to decline your claim on the grounds that Covid-19 disruption was not unforeseeable. However, the extent to which you can be expected to see into the future will depend on your individual circumstances.
