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Travel insurance: no cover for a trip within a trip

Barry goes on a cruise in the United States

For a 60th birthday present, Barry’s family purchased flights for Barry to take a trip around the United States. Barry decided that he would like to go on a cruise while on holiday in the United States. He paid for his cruise using his credit card with Camel Bank (“Camel credit card”).

One of the benefits attached to the Camel credit card was that Barry received complimentary travel insurance with ‎Impala Insurance (“Impala”) when he booked an international trip using his Camel credit card.

Whilst on the cruise, Barry contracted pneumonia and incurred medical expenses of $4,122.39 USD. Barry made a claim to Impala for these medical costs.

Impala declined Barry’s claim because its policy only provided cover where the full costs of the customer’s international travel was purchased using a Camel credit card.


Barry’s view

Barry believed that Impala incorrectly declined his claim. Barry argued that Impala’s policy should cover his medical costs because he incurred these costs during the cruise which he had paid for in full using his Camel credit card.

Barry also argued that he was not told about the policy requirement that he needed to pay all the costs of his international trip with his Camel credit card. 


FSCL’s view

In our view Impala was entitled to decline Barry’s claim.

In order for cover to be activated for international trips, the insurance policy stated that the international trip must commence and end in New Zealand and the full costs of that trip must be paid for with a Camel credit card. Although the cruise was an ‘international trip’ in that Barry was overseas when he went on the cruise, it was not an ‘international trip’ as defined in the policy. To be an eligible ‘international trip’ under the policy, the cruise would have had to start and end in New Zealand.

Also, all costs of Barry’s trip from the point of leaving New Zealand and then returning to New Zealand needed to be paid for with his Camel Credit card. As only part of Barry’s international trip was paid for on his Camel credit card, cover was not activated. This meant that there was no contract of insurance in place between Barry and Impala when Barry made his claim.

It was unfortunate that Barry was unaware of the activation requirements under the policy. However, it is standard industry practice for an insurance company to set out the terms and conditions under its insurance policy. It is then up to the customer to read the policy and to understand those terms and conditions. The circumstances of Barry’s claim did not meet Impala’s terms and conditions for cover to be provided. We found that Impala was entitled to decline Barry’s claim.


We recommended that Barry’s claim was not upheld and that Barry withdrew his complaint.