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Not quite the deluxe experience

Ali and Hans booked an 8-day scenic tour by train, through the French Rivera. They purchased insurance for their tour.

While on the tour, Ali and Hans were told that, due to a landslide over the tracks, they would have to travel two days of the tour by bus, on an altered route. Their tour company offered them a $2000 refund for the missed leg of the tour.

Ali and Hans did not accept the tour company’s offer, and instead sought a refund from their insurer for 50% of the cost of the whole trip. The insurer declined their claim.

Ali and Hans complained to FSCL.



The insurer declined Ali and Hans’s claim because they believed the claim was for loss of enjoyment of their trip, which was excluded under the policy.

Ali and Hans said that their claim should not have been declined as it was not for loss of enjoyment, but rather it was for the difference in value of the product they purchased (a high end train journey with gourmet meals) and the product they received (travel by bus with food served and eaten on board).



Our preliminary view was that Ali and Hans should discontinue their complaint. We accepted that they had paid for a premium product, and received a budget product. There was therefore a difference in value which was covered by the policy. However, the difference in value was less than the $2000 refund offered by the tour company.

As Ali and Hans were able to recover their financial loss from the tour company, we found that the insurer had acted fairly in declining their claim.



The insurer was pleased with this outcome. Ali and Hans were not. They asked us to reconsider our findings and provided reasons why they felt we had come to the wrong conclusion. We reviewed the complaint, however we were not dissuaded from our original view. We recommended that the complaint not be upheld.


Insights for consumers

Consumers should understand that where a refund can be sought from another source, insurers will not cover loss. This is so that consumers being paid out twice for the same loss.