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What happens if I’m aware of the possibility of a change of plans before I purchase my insurance?

In July, Shona’s employer informed her of a restructuring which may affect her position (because they had an excess of persons in the particular role Shona performed). In early December, Shona bought tickets to Fiji, for a friend’s wedding in June the next year. At the same time, Shona also purchased travel insurance. On 14 December, Shona’s employer wrote to her about future employment, outlining the options available to her. Shona could accept a $10,000 lump sum and be reassigned on a lower level, resign and receive $25,000, or relocate to elsewhere in the country and continue in her current role.

Shona’s view

Shona decided to resign and pursue further study. As a result, Shona cancelled her trip to Fiji. Shona made an insurance claim for her cancellation costs because the trip fell within her course time. Shona argued that the cancellation costs were covered under the policy because it was “through circumstances neither expected nor intended by her and outside of her control.”

The insurer’s view

The insurer declined Shona’s claim, relying on an exclusion clause in the policy which stated

“We will not pay if Shona was aware of any reason, before her cover commenced, that may cause your journey to be cancelled”

The insurer believed that because Shona’s employer had given her options where her travel plans would not be affected, Shona’s cancellation costs were not covered.

The exclusion clause did not apply to claims where Shona is made redundant provided Shona was not aware that the redundancy was to occur prior to purchasing the policy.

The insurer said that Shona was aware that she may be made redundant as early as July. Therefore, before her period of cover commenced, Shona was aware of a reason that may cause her journey to be cancelled. Shona knew about her potential redundancy well before she purchased the travel insurance. The insurer said that travel insurance policies were designed to protect parties when the decision whether to travel is out of the insured party’s hands.

Shona complained to FSCL.


Unfortunately for Shona, we agreed with the insurer that her decision to pursue study was a personal choice. Shona had other options available to her. Had she continued working for her employer (in either of the proposed capacities) it is likely that her travel plans would not have been affected.

Shona’s decision to cancel her trip was due to a change of plan and was not covered under the insurance policy.

Key insight for consumers

Before cancelling your trip, make sure your cancellation costs will be covered by your travel insurance policy.  Invariably, you will not be covered because you change your mind.