Travel Insurance Refunds

No longer travelling and want your money back on your travel insurance?

Our travel insurance experts provide the low down.

All travel insurance policies offer a cooling-off period during which time you can cancel your cover and get a full refund. This is usually between 14 and 21 days from when you purchase your policy and will only be paid if your trip hasn't yet started and you haven't already made any claims.

After the cooling-off period is up, ordinarily you are no longer entitled to a full refund as you will have had enough time to read through your policy wording to understand the terms and decide whether it is the right policy for you and your holiday.

It is important to note that all policyholders have a right to request a refund of some sort if they believe that the service cannot be provided and that their policy is not fit for purpose.

What are my options For covid-19?

In the wake of the coronavirus pandemic (COVID-19), few industries have fell as far and as fast as travel and tourism. Never before had international travel been restricted to such an extreme, causing disruption, frustration and angst for so many Australians. Under these extraordinary circumstances, many insurers are stepped up to offer flexible options outside of their usual policy terms.

Consumer Confusion on Entitlements

Are travellers entitled to get a refund on their policy if they can no longer take their holiday due to circumstances outside of their control?

There is a lot of misconception amongst consumers on their rights to a refund on their travel insurance policies. Regardless of the cause of cancellation, you're bound by the contract you entered into when you bought your policy. The refund terms are usually outlined under a section titled "money-back guarantee" or "cooling-off period".

It is important to note that consumer guarantees under Australian Consumer Law may not apply to financial service providers, including insurers. Having said that, insurers are regulated and there is an expectation on insurers to consider their conduct in light of the current circumstances and to act in a fair manner that is in line with the duty of utmost good faith.

While many would-be holidaymakers who have received travel vouchers or their money back for cancelled trips from airlines, accommodation providers and tour operators, would no longer feel their policy is necessary, it’s worth thinking twice before cancelling it. You must be sure that you no longer need the cover and do not want to exercise any rights under the policy. Once a policy has been cancelled you will be unable to lodge a claim against it.

Refunds & Credits Faq'S

Questions on travel insurance refunds have been coming thick and fast. We answer some of the most common questions we're getting on cancelling travel insurance and obtaining a refund either in cash or other means such as a credit voucher.

I'm not going on my trip, so why won't my insurer give me a full refund?

If you're not getting a full refund, you're likely to be outside of the cooling-off period. Another reason you may not receive a full refund is that your policy may have been in place and providing protection for some time. Something that a lot of people are unaware of, unless they’re unfortunate enough to have to use it, is that the cancellation benefit on a travel insurance policy starts from the day that you purchase your policy. So whilst it may seem like a policy hasn’t been ‘used’, the insurer was on risk for any pre-trip cancellation should an event such as injury, illness, bad weather or natural disaster have prevented the holiday from going ahead. The pre-trip cancellation benefit makes up part of the premium that you paid and the protection your insurer provides.

Australian Financial Complaints Authority (AFCA) states, "From the time a travel insurance policy is purchased, some cover is generally provided for cancelation and unforeseen events. This means the policy is providing coverage or already ‘doing work’. For this reason, it is fair for an insurer to retain a portion of the premium in consideration of this cover.

For example, if you made your travel booking and bought a single trip travel insurance policy back in December 2023, your cover for holiday cancellation would have started the day you bought your policy. If you or a family member became ill and you had to cancel or rearrange your trip, you would have been covered for lost deposits and change fees. Your insurer has already been protecting you for any pre-travel issues for the months elapsed since. This is regardless of whether or not you made a claim.

How is a partial or pro-rata credit or refund calculated?

Travel insurance is there to protect you and your holiday both before and during your trip. Often part of the premium paid includes pre-trip cancellation. The percentage of premium that this makes up varies between insurers. The amount of refund will depend upon a few factors:

• The type of policy purchased (whether the policy was an annual multi-trip or single trip policy)
• Whether the policy had commenced at the time of cancellation
• Whether any travel took place during the term of your policy
• Whether the policy had "any work to do". This date may vary depending on the date of policy cancellation, or in instances where people were already travelling, the date they returned to Australia.

Insurers may have variations to how they calculate the "unused" portion of your policy. In providing a partial or proportionate credit or refund, insurers should clearly outline to the customer how the refund amount was calculated. For a holiday that never took place, your insurer is likely to calculate what portion of pre-trip cancellation they were on risk for. Generally speaking, this is from the time you purchased your policy to when your travel was restricted, or cancelled. For a long duration holiday that was significantly cut short, your insurer may offer a pro-rata credit voucher for the 'unused' portion based on the day you returned home.

My friend got a refund, why can't I?

Each insurer takes a slightly different approach to refunds and credits. Even if you bought the same policy as your friend or travelling companion, refund requests outside of standard policy terms are usually considered on an individual basis taking many variable factors into account.