Australian travel insurance comparison site www.comparetravelinsurance.com.au helps to explain the misunderstanding around travel insurance and cancellation cover, so that travellers can head on holiday stress free and avoid being crushed by unrealistic expectations.
Natalie Ball, Director, Compare Insurance
"The most common negative travel insurance reviews we receive on our website are regarding cancellation cover – and the misconception that all cancelled or missed travel situations are covered . We often read feedback from customers who are unhappy because of unpaid claims but the majority of complaints are for situations that are not covered. Our aim is to set the record straight and clearly explain to travellers when they will, and won’t be covered for cancellation and delays when travelling this holiday season."
Cancellation cover is explained legally in policy documents as:
“Lost deposits and cancellation fees for pre-paid travel arrangements due to unforeseen circumstances neither expected nor intended by you or which are outside your control.”
So what are considered ‘unforeseen circumstances’?
...And when are you covered for travel delays, alternative transport and cancellation? We highlight some scenarios:
- Accident en route
You will be covered if you missed your flight/booked transport because of a motor vehicle accident, railway accident or marine accident en route and you can prove that there was no other way for you to get to your transport carrier. You will need a letter from the official body in the country you are in to prove the accident happened, such as the Institute of Traffic Administration.
- Flight cancellations
You will be covered if flights are cancelled due to severe weather or airlines strikes.
- Missed accommodation
If your flight was cancelled due to a covered reason such as severe weather or airlines strikes and you missed pre-booked accommodation. Your travel insurance will reimburse you for this.
- Extreme events
Natural disasters, hijacking, riots and civil unrest which affect travel arrangements are all covered. The event must have begun after the insurance policy was issued.
- Severe sickness or severe injury
You will be covered for lost deposits if you become injured or ill and become unfit to travel, or if you have to return home if a medical practitioner notifies the insurer that you are unfit to continue with your trip. You will need this in writing and it generally cannot be from an undeclared pre-existing medical condition.
- Severe illness, severe injury or death of a close relative
If you need to return home or cancel a trip because a family member is unwell or there has been a death to a close family member then your travel expenses will be covered. This is subject to age limitations, pre-existing medical conditions and the relative residing in Australia or New Zealand.
- Theft of passports, travel documents or credit cards
If your passport or documents are stolen, travel insurance will reimburse you for your expenses incurred when replacing your items. Subject to you producing a police report within 24 hours of the incident. You wouldn’t be covered if your belongings were lost or stolen if you were intoxicated.
- Frequent flyer points
If your flight is cancelled due to unforeseen circumstances some insurers will reimburse you the monetary value for loss of frequent flyer points that you might have used to pay for your flight.
- Disruption of journey
If your flight/transport is delayed more than 6 hours you are entitled to claim accommodation and food that you may need after this time. You can claim around $200 (will vary from insurer to insurer) for each full 24 hour period that the disruption continues.
- Alternative transport expenses
If your flight/transport is cancelled and you need to reach a pre-booked event (e.g. sporting event or funeral) your alternative transport will be paid for under travel insurance. Even if the reason your flight/transport was cancelled due to a non-covered event such as mechanical fault. As you have already started your journey you can use the ‘alternative transport delays’ benefit of the policy rather than ‘cancellation benefit’.
Different aspects of your travel insurance policy relate to different times of your trip. Generally speaking anything that happens before travelling falls under the ‘cancellation cover’ and anything that happens once you have already started your journey will fall under ‘alternative transport expenses’ or ‘travel delay’.
Remember in all these covered circumstances travel insurance will only reimburse you for the non-refundable cost of the trip you’ve already paid for.
You must be able to prove to the insurer that you have done everything reasonable to avoid delay expenses, and in many cases you are going to need to provide written proof of cancelled flights, delays or loss.
So what’s not covered under cancellation cover? Here are some examples:
Of course not every situation can be covered and this is when the confusion starts.
- Flight cancellations
The most common misunderstanding is that all cancelled flights, for any reason are covered…this is not the case. For example, if your flight was cancelled due to a mechanical fault, overbooking, maintenance, repairs, rescheduling, service faults or the airline closing down then you are not covered. It is the airline’s responsibility to compensate, reimburse, or find an alternative flight for the traveller – not the insurer.
- Missed flights
If you turn up to check-in 30 minutes late and miss your flight you won’t be covered. Any delays because of your own negligence are not covered under travel insurance. Insurers will ask that you left ‘sufficient’ time to get to the airport. This includes missed connecting flights.
- Missed accommodation because of missed flights
If your flight is cancelled because of a non-covered event such as a mechanical fault and you then miss pre-booked accommodation, it is also not the insurer’s responsibility to reimburse you for your accommodation costs but it is the airline’s or your transport carrier’s.
- I just didn’t feel like it
If you cancel your trip just because you decided not to go, travel insurance will not cover the cost.
- Annual leave
If your employer cancelled your leave and then you couldn’t take your trip your travel insurance will not cover the cost as it is seen as your employer’s responsibility.
- Visa refusals
If your destination visa is denied and you've already paid for flights and accomodation travel insurance cannot help, as it’s up to the traveler to verify that their visa requirements have been met. In some cases the airline might refund your tickets as they're not allowed to fly passengers to a country without a visa.
- Unfit to travel
If you have been toldby a medical practitioner that you are unfit to travel and you fail to promptly cancel your pre-booked travel you will not be covered.Also if you travel knowing you are unfit to do so and have been advised against it from a medical practitioner and your trip has to be cancelled, delayed or disrupted because of illness you are also not likely to be covered.
If you or another member of your group is suddenly required to sit an exam and cannot travel then your travel insurance will not cover your travel costs.
- Cancelled tour
If your booked tour is cancelled due to under booking this is not covered situation.
A travel insurance policy is a legal document and yet so many travellers chose not to read the Product Disclosure Statement which explains in detail all the policy benefits. Each insurer has a list of inclusions and exclusions, to avoid any doubt, check this before you travel.