Call us: 0800 347 257

Too close to home

In 2022, Aria booked a return Cook Strait ferry crossing for a holiday from Wellington to the upper South Island. Aria paid for the travel using a card which came with complimentary travel insurance.

Aria’s holiday was disrupted when her return sailing was cancelled. The ferry operator was unable to run the sailing because some crew were in isolation due to COVID-19.

Aria managed to book a different sailing home. She was not left out of pocket for the cost of this because the original return sailing was refunded. However, she incurred accommodation and other costs because she had to stay in the South Island for two more days. Aria claimed for these costs.

The insurer declined the claim. Under the policy wording, cover only applied to trips which were more than 150 km from the cardholder’s home. Aria’s destination was less than this.

The insurer went on to explain that even if Aria’s destination had been more than 150 km from her home, the policy would not have responded. It only provided cover for cancellation costs that arose from one of the specified events listed in the policy. Aria’s claim did not fall within these.

Further, the claim would have been excluded. Cover did not extend to any loss arising from circumstances Aria knew about. The potential impact of COVID-19 was known when Aria booked her travel.

Aria complained about the insurer’s decision to decline the claim. She believed the policy did not account for the fact the North Island and South Island are separated by Cook Strait.

The insurer confirmed their decision to decline the claim. Aria asked FSCL to review her complaint.


Aria accepted that the insurer had validly declined the claim. However, she believed the policy needed to change to reflect New Zealand’s geography.

The insurer acknowledged the unfortunate position Aria was left in, but maintained they would not pay the claim.


We concluded that the insurer had not done anything wrong by declining the claim.

However, we encouraged the insurer to discuss the suitability of the policy with the policyholder, the card company. While it is common for insurers to have a distance restriction in their policies (like in this case), policies which are available to consumers to purchase seem to have shorter distance restrictions.

We also suggested that the insurer may also want to discuss with the policyholder whether they want specific wording in the policy about COVID-19 (or pandemics and epidemics). It is becoming common for travel insurance policies to have specific wording about COVID-19, or supplementary information available to consumers explaining cover for COVID-19. Some insurers offer policies with limited COVID-19 travel insurance benefits.


Aria agreed to discontinue her complaint.

Insights for consumers

Some travel insurance policies provide more comprehensive cover than others. Consumers should make sure the policy meets their needs before they take it out and book their travel. If a consumer is unsure about this, they can contact the insurer or the company they intend to purchase the policy through (such as their travel agent) to discuss their needs.

If a consumer is relying on a complimentary policy provided as a credit card benefit, they should check whether they have met the criteria to activate cover.