Claude and Clementine went on a Danube river cruise . Heavy rain on the sixth day of the cruise caused the river water level to rise rapidly. The boat on which Claude and Clementine were travelling could not sail further up the river . Claude and Clementine were stranded.
For five days Claude and Clementine stayed on the boat . The tour company operating the river cruise offered alternative tours to those originally booked on Claude and Clementine’s itinerary. Claude and Clementine went on two of the seven tours offered. Unfortunately the tour company did not offer Claude and Clementine a refund under the tour’s standard terms .
The insurance claim
Claude and Clementine returned to New Zealand and claimed $9,255 : the full cost of the number of days they were stranded. Claude and Clementine’s claim was declined by their insurance company because their loss was a loss of enjoyment, which was not covered by the policy. Claude and Clementine argued that their loss was a loss of value : they were delivered a service of a wholly different nature to the one they paid for.
The parties could not agree on a resolution and the complaint was referred to FSCL.
Unfortunately FSCL was unable to resolve the complaint by agreement. The parties asked FSCL’s CEO to give her recommendation on the complaint.
The insurance policy wording covered lost deposits for travel paid in advance by Claude and Clementine if their journey was cancelled or shortened as a result of unexpected circumstances.
The insurance company argued that the bad weather and subsequent flooding was not “unexpected”, because Claude and Clementine could have anticipated bad weather. FSCL’s CEO did not accept this argument. Who would pay $18,000 to go on a cruise which they expected would be significantly disrupted ?
FSCL’s CEO accepted that Claude and Clementine suffered a loss. The alternative tours offered were of a lesser quality to the original itinerary. However, there was no evidence of the difference in cost between the original tours and the amended tours. Without this evidence, FSCL’s CEO could not conclude that Claude and Clementine had suffered a financial loss or a “loss of deposits” that was required for cover under the policy wording.
Claude and Clementine had undoubtedly suffered a loss of enjoyment . However, loss of enjoyment was specifically excluded from cover under the policy wording.
Unfortunately for Claude and Clementine, FSCL could not uphold the complaint.