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How sick is too sick?

Jason and Kawa had planned a safari tour to Africa. Both Jason and Kawa obtained travel insurance policies from the same insurer. A month before their trip, Jason got ill and his GP declared that he was unfit to travel for the next three months. Kawa cancelled his trip because most of the tour costs were intended to be shared and, without Jason participating, Kawa could not afford the additional costs of rebooking as a sole traveller.

Jason submitted a claim to the travel insurer, who fully refunded the cost of Jason’s cancelled trip. However, when Kawa claimed a refund for his cancelled trip, the insurer declined his claim.

The insurer said that the policy only covered Kawa cancelling his trip if the cancellation was due to the unexpected and serious sickness of his travelling companion (Jason). The insurer said that Jason’s sickness was not life-threatening, and did not necessitate Kawa cancelling his trip to remain in New Zealand with Jason.

Kawa complained to FSCL that the insurer had incorrectly declined his claim.



Kawa said that the insurer should have taken into account that it was outside Kawa’s control that the trip was cost prohibitive if he and Jason could not travel together.

Kawa also complained that Jason’s hospital stay of more than one day should mean Jason was considered to have a serious sickness.



Our preliminary view was that the complaint should be discontinued, because the policy did not cover the claim. The policy’s ‘serious sickness’ definition meant that Jason’s sickness needed to be of a severity that it was medically necessary for Kawa to stay in New Zealand to be with Jason, because there was an immediate threat to Jason’s life. We reviewed the evidence and found that, although Jason was too sick to travel himself, it was not medically necessary for Kawa to remain with Jason.

We also noted that Kawa’s policy was a business policy. It was intended to cover situations where business associates are on work trips. If one associate were to fall ill, it would not be unusual for the other to continue on with the work trip (as opposed to a personal policy where it would be more likely for you to stay in New Zealand if your travel companion could not travel).

There was the ability for Kawa to nominate people to be a named person on his policy.  Had Jason been a named person on Kawa’s policy, then Jason would only have to have been suffering from a ‘sickness’, not a ‘serious sickness’ for Kawa’s cancellation to be covered.

Kawa’s problem was that he was not aware that he would have to name people on his policy, to take full advantage of its cover.

We suggested Kawa discontinue his complaint. However, we also suggested that he consider contacting his insurance broker about the alleged failure to inform him of the need to name people on his policy.



The insurer accepted our view. Kawa disagreed, but decided to discontinue his complaint. He did not choose to pursue a complaint against the broker.


Insights for consumers

It is important for consumers to read and to understand their policies. If a policy is unclear, or if you do not know whether it will cover a certain situation, then consumers should question their brokers and insurance companies. If a situation occurs that may necessitate the cancellation of travel, check with your broker about whether you will likely be covered, before you authorise the cancellation.