Travel policyholders who wanted a payout for the full cost of a cancelled cruise have lost a dispute with their insurer, which successfully showed their coverage was limited.

The claimants had to cancel their trip in October 2023 when one of them was told – while boarding a plane to leave Australia – that he required urgent treatment for a malignant melanoma.  

They received a refund for their airfares and lodged a claim over their pre-booked cruise package worth $23,802.  

Zurich accepted the claim but said the insureds had chosen a $2000 cancellation cover. It offered to pay $1750 after applying the $250 excess.  

The policyholders argued Zurich “improperly prepared” their policy, saying they had to adjust an earlier version after the insurer requested additional travel information.  

They said a second policy was issued, with a premium of $2133, and this was incorrectly changed by Zurich staff from a comprehensive travel policy to a cancellation cover-only policy. 

Zurich said the claimants’ initial policy had only $2000 cancellation cover, and the terms of this policy were replicated in the second one.  

The second policy had been issued when one claimant said their date of birth was incorrect on the first document, the insurer said.  

In its dispute decision, the Australian Financial Complaints Authority accepts that a $2000 cancellation cover was selected on the first policy and transferred to the second.  

And it says a call transcript shows the claimants were made aware the new policy would have the same cancellation cover and excess

“There is no evidence that the complainants contacted the insurer to query or amend the level of cover prior to the claim being made,” an AFCA ombudsman said.

“While I empathise with the complainants’ circumstances, the insurer’s settlement offer represents the full entitlement for cancellation expenses and satisfies its obligations under the policy.”  

See the ruling here.