The financial services ombudsman has backed an insurer’s decision to deny a claim for a cancelled holiday because the policyholder did not buy optional natural disaster cover.

The claimant booked a 10-day trip to Vanuatu last June, but her flight from Brisbane to Port Vila was diverted due to bad weather.

She never reached Vanuatu and lodged a claim to have $3532 of prepaid accommodation covered.

Mitsui Sumitomo Insurance said its policy covered trips being cut short only when it was deemed “necessary and unavoidable as a result of specified events” such as illness, or the death of a relative back home. Natural disaster cover was optional.

The claimant said she bought “gold” cover, which she believed included natural disasters and had “unlimited cancellation”.  

But the Australian Financial Complaints Authority says there is evidence the woman was made aware the optional cover was not included in her gold product.

The product disclosure statement included a disclaimer around natural disasters, marked “important”, that stated: “You must have purchased this option and the option must be shown on your policy schedule.” 

The insurer’s online application required customers to select yes or no for each add-on, including natural disaster coverage, which the traveller left blank.

The claimant said she did not recall the option to select the coverage. She also provided screenshots of information on the insurer’s website that she said was misleading.  

But AFCA says the information was “general in nature” and referred customers to the PDS for full details.

“There are no clearly misleading statements in it. To the contrary, there is one screenshot which specifically explains gold cover, and it does not say it includes the natural disaster upgrade.

“This undermines the complainant’s position.” 

See the ruling here.