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Mis-characterised flights lead to reduced claim

In March 2020, Jonida was travelling through Cambodia on her way to Russia. While she was in Phnom Penh, countries began closing their borders due to the developing COVID-19 crisis, and airlines started cancelling flights.

Jonida discovered that her flights to Russia had been cancelled, and she immediately booked emergency flights home, direct from Phnom Penh to New Zealand. These flights were cancelled as well, but Jonida booked replacement flights, and she was eventually able to return to New Zealand.

After Jonida returned home, she filed a claim with her travel insurer for the cost of her emergency flights home.

The insurer initially thought Jonida’s claim would be declined, because the claim was caused by Russia’s border closures, and Jonida’s policy excluded claims related to government interference. But eventually the insurer reversed that decision and accepted Jonida’s claim.

However, the insurer deducted $800 from Jonida’s claim, to account for a refund Jonida had received for one set of her flights.



Jonida did not think the insurer should be deducting the $800 cost of the flights from her claim.

She said the $800 flights were her first set of emergency flights home from Phnom Penh. Jonida had received a refund for these flights from the airline, but she had not lodged a claim for the cost of the flights. So, it seemed strange to her that the insurer was trying to deduct the $800 from her claim.



After looking over Jonida’s claim, we agreed with Jonida, and said the insurer should refund the $800 cost of the flights.

We found that there had been some misunderstanding about the flights. The insurer thought the $800 flights were part of Jonida’s original itinerary – if this were the case, the insurer would have been entitled to deduct the cost of the flights from Jonida’s claim.

But the flights were actually for Jonida’s first set of emergency flights home, which were cancelled a few days before departure. The insurer should not have deducted the cost of these flights from Jonida’s claim, without also adding the cost of the flights to the claim.

It seemed that this misunderstanding had occurred because the receipts for the flights and the refund notice were both mainly in Cambodian. The insurer had simply misinterpreted the receipts.



The insurer agreed with our view, and agreed to pay Jonida the $800. Jonida was very happy to receive the $800 within two weeks of FSCL opening an investigation.


Insights for consumers

This was a case that was resolved very quickly once FSCL became involved. Sometimes, you can end up speaking at cross-purposes with your insurer, mortgage adviser, or other financial service provider. It can be very helpful to have an independent and impartial view of events – and that is something FSCL can provide.