Travellers who sought reimbursement for flights home following a cancelled Perth-to-Sydney luxury train ride have lost a dispute with their insurer.

Chubb agreed to pay $306 for additional hotel, travel and public transport costs, but would not cover the flight costs, because the claimants had been refunded $2172 by the train service provider.  

The claimants argued the insurer’s decision was unfair, noting the train trip was a premium travel experience and it was not reasonable to compare it to a commercial flight to NSW.  

They said the refund should be removed from the insurer’s calculations, or Chubb should consider the cost of rebooking the train trip in future when it may be more expensive.  

They added Chubb should pay for additional meal costs during their extended stay in Perth, and its decision to apply a $250 excess for each traveller was unfair.  

Chubb said the policy’s purpose was to restore the claimants to their position prior to the loss.

It argued if the claimants were to receive flight expenses without offsetting against the train ticket refund, they would make a financial gain.

It acknowledged the luxury trip was more than just a mode of transport, but said its policy did not cover the “loss of an experience”.

In its dispute decision, the Australian Financial Complaints Authority says it is not fair to make Chubb pay for the flights.  

“Given the complainants were fully refunded for the cost of their unused train journey, I am satisfied the insurer is entitled to offset the refund against their claim for alternative flights and associated costs,” an AFCA ombudsman said.  

“If the insurer were to refund the cost of the flights without offsetting these costs against the refund the complainants received, the complainants would not be paying for their trip home.

“I am not persuaded this is the intent or purpose of the policy.”  

The authority says the insurer does not need to cover additional costs for meals and travel, because these were not due to a flight-related disruption.  

See the ruling here.