In November 2019 Hemi purchased a two-week tour of Vietnam scheduled for September 2020. The tour package included return flights between Vietnam and Australia, so Hemi just needed to arrange return flights from New Zealand to Australia.
In April 2020, the tour was cancelled due to the Covid-19 pandemic. Hemi submitted a claim to his insurer for the cost of the tour.
The insurer declined Hemi’s claim because his policy included an ‘activation requirement’ that he hold return tickets to New Zealand for a trip of no more than 60 days in order to be covered. Hemi hadn’t booked his New Zealand to Australia return flights yet because the tour company hadn’t confirmed the exact dates of the Australia to Vietnam leg.
Hemi thought it was unfair for his claim to be declined since his trip was clearly going to be less than 60 days, and he simply couldn’t book his New Zealand return flights until the tour company confirmed dates of the Vietnam leg of the journey.
The insurer said the policy activation requirement was clear. Hemi needed to hold a return ticket to New Zealand showing his trip was less than 60 days in order to have cover.
We agreed the wording of policy activation requirement was clear, but in all the circumstances, we thought it was unfair for the insurer to decline Hemi’s claim.
There was no evidence to suggest Hemi’s trip would be any longer than the two-week tour. We thought it was unreasonable for the insurer to expect Hemi to book flexible return flights from New Zealand in order to meet the policy activation requirement until such time as the dates and times of his Vietnam flights were confirmed.
The insurer agreed to settle Hemi’s claim based on our view of what was fair in all the circumstances.
Insights for consumers and participants
FSCL take into account the principle of fairness when reviewing complaints. Very occasionally, the circumstances of a particular complaint might mean overall fairness overrides the clear wording of an insurance policy.